After a chaotic and tumultuous few weeks following the UK’s vote to leave the EU, MIA’s chief executive Jane Longhurst believes the economic outlook will steady and confidence will return once Theresa May takes over as Prime Minister.
In the days after the Brexit vote, 92% of MIA members said enquiries have either stood still or declined. As a result, 20% of respondents said they have stopped recruiting new talent in a bid to freeze spending.
In addition to this, more than two-thirds (68%) of members felt there will be a slowdown in capital investment by corporates and overseas investors and, as a result, have started implementing a range of diversification and cost-saving strategies to soften the impact.
"A real sense of low confidence"
Longhurst says that a lack of a contingency plan for a 'leave' result has caused confidence in the market to nosedive. "We know from our own EU debate in May that the majority of the sector were voting to remain in the European Union, so were shocked by the eventual outcome.
"Talking to our members there is currently a real sense of low confidence – particularly because no contingency plans were put in place for a leave result. Hopefully now Theresa May’s appointment will have a steadying effect and the markets will improve."
A freeze on spend
According to MIA’s member survey, 54% of respondents are looking at ways to diversify their business in order to optimise revenue and profit where possible, while 50% have frozen non-essential spend.
More than half (55%) of respondents believe the current economic uncertainty will have an impact on the sector’s cost margins and feel pressure will now be placed on them.
"As an industry I think in the short term we will continue to experience a period of uncertainty with businesses being nervous," Longhurst adds. "Yet, the exit is expected to take two years plus and we are in real danger of talking ourselves into another recession.
"Instead, we need to be championing greater incentives for international corporations to hold meetings and conferences in the UK and wider initiatives to ensure freedom of movement and trade within the European Union remains."
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