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Second wave of COVID-19 a bigger threat than no-deal Brexit say mid-sized businesses

05 October 2020

  • Two thirds of businesses say second wave will have a bigger economic impact than no-deal Brexit
  • Risks that businesses are distracted by COVID-19 as only one third say adapting their business for Brexit is in top three immediate concerns.

The UK’s mid-sized businesses – responsible for one third of UK jobs and £1.4tn in revenues – risk having their Brexit plans side-lined as they deal with a second wave of COVID-19, according to new research from accountancy and business advisory firm BDO LLP. 

The third monthly Rethinking the Economy poll of 500 mid-sized businesses leaders, published today, shows that only one third of businesses have “adapting my business for Brexit” in their top immediate business concerns and instead are focused on making loan payments (37%) and managing redundancies (36%). Just over a third (36%) did cite managing supply chains as an immediate top priority, an issue likely to be made more complex by the imminent prospect of a no-deal Brexit. 

The research also shows that the majority of medium-sized business see a domestic second wave of COVID-19 as a greater risk than a no-deal Brexit for both their businesses (66.5%) and the wider UK economy (61%). This sentiment is echoed by businesses throughout the UK, with Greater London (87%), the South East and the West Midlands (74%) the most concerned about a second wave. 

The Central South was the only region to buck the trend, with 83% of businesses citing Brexit as a bigger threat to the economy. 

Commenting on the results, BDO’s managing partner, Paul Eagland, said:

“Businesses are facing two major challenges and remain in survival mode. COVID-19 has pushed many of these businesses to rethink their operations, with almost a third still making changes to their businesses as a result of the pandemic. The uncertainty around the virus, coupled with the complexities a no-deal Brexit could bring before the end of the year, leaves business leaders spinning a number of plates.”

Looking ahead, sentiment around recovery is slightly more positive. Over the next six months, 41% of medium-sized businesses plan to make investments particularly in technology, and 40% plan to hire graduates or apprentices. 

Paul Eagland, added:

“Despite COVID-19 derailing some plans and sparking debate around the Government’s regional ‘levelling up agenda’, the majority of mid-sized businesses (86%) are still hopeful that progress will be made over the next three years. 

“History teaches us that medium-sized businesses will play an important role in the UK’s economic recovery. Early signs of investment and employment are heartening and bode well for the economy. 

“However, as Brexit negotiations come to a close, it is important these businesses, particularly in the sectors and regions disproportionately impacted, receive the right information and financial backing from the Government to support them through another rocky period.” 

Visit our Rethink hub

 

Notes to editors

Medium-sized businesses are defined as businesses with revenue between £50-£350m.   The survey was conducted by Censuswide on behalf of BDO in July 2020. 

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world. 

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy.  

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.  

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn.  

Contacts

Tom James / Francesca Bliss
Headland Consultancy on behalf of BDO LLP
Tel: +44 (0)78 1859 4991
Email: [email protected] 

BDO press office: 
Tel: 020 7893 3000
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