Financial chiefs voice Brexit uncertainty concerns
Key financial figures have warned that uncertainty surrounding Brexit is having a negative impact on business decisions.
They suggest that the situation is likely to continue once any agreement is reached too, while low productivity and weak demand for goods were also listed as concerns.
Deloitte found that 88% of chief financial officers (CFO’s) reported that business uncertainty is high while just under two thirds said they expect the long-term business environment to worsen.
The level of those who believe uncertainty is above normal has fallen from the last quarter, but the latest figure is the second highest since 2012.
The consultancy firm has described perceptions of uncertainty as “elevated” while KPMG has reported a rise in the number of Scottish businesses facing insolvency since the June vote.
In the three months to the end of September, corporate insolvency appointments rose by 30% when compared to the same period from 2015.
Administration appointments were up by 42% alongside a 28% rise in liquidation appointments, suggesting that both large and small businesses are being adversely affected.
For comparison, the period between April and June this year saw a decrease in insolvency appointments and liquidations, although administrations rose by 13%.
KPMG said that despite long-term uncertainty, the majority of businesses have confidence in the economy.
Planning ahead will still be key, as firms will need to ensure they have the necessary contingency plans in place should they find themselves in financial difficulty.
Changing market conditions and new regulations could limit sales and ultimately hit the bottom line, especially among firms that have strong ties to the EU.
Businesses will need to focus on their financial management and operational activity, while still looking to find ways of reducing their costs effectively.
Such activity should enable a firm to strengthen its position and gain some level of protection should the economy experience another downtown.
By Phil Smith
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