A third of UK’s family firms fear impact of Brexit, says PwC survey

A third of the UK's family firms fear the impact of Brexit, according to PwC
A third of the UK's family firms fear the impact of Brexit, according to PwC
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MORE than a third of the UK’s family businesses are concerned about the potential impact of Brexit, according to new research from PwC.

However, PwC’s survey found that half of the UK’s family firms don’t plan to do anything in response to the UK’s impending exit from the EU. PwC’s eighth Family Business Survey concludes that the sector has experienced a decline in its financial performance, with only 60 per cent reporting sales growth over the last year, compared with 73 per cent in the 2014 survey.

A PwC spokesman said: “Despite the recent slowdown in growth, the UK’s family businesses remain bullish about the future. The spectre of Brexit has not impacted their pre-referendum growth forecasts, with 93 per cent anticipating to grow over the next five years, and 94 per cent confident of growing their core business in existing markets.”

“While 52 per cent of family firms globally expect to develop new markets, only 34 per cent of their UK counterparts anticipate expanding into new country markets.

“However, Brexit has failed to dampen their export ambitions as UK family businesses predict that their collective exports, as a proportion of overall sales, will increase from 19 per cent to 24 per cent over the next five years.”

Sian Steele, UK family business leader at PwC, said: “Despite tough economic conditions and the accelerating pace of change, the family business sector remains vibrant and ambitious, with almost one-in-five (18 per cent) expecting to grow quickly and aggressively.

“In some areas UK family firms are not demonstrating the resilience and confidence of their global counterparts, but these issues may be more about confidence in the short-term future rather than the ability to grow and prosper.

“Family firms remain a vital part of the UK economy, offering stability and jobs, a commitment for the long term, and responsibility to their communities and employees.”

However, only 11 per cent of UK firms plan to diversify within their core business, and only a third (34 per cent) plan to sell into new countries. Only 54 per cent of the family firms surveyed said they discussed digital disruption at board level.

Ms Steele said: “The UK is lagging behind its western European peers in its appetite for exporting to new territories with only a third planning expansion into new markets. It’s also of concern that so few plan to diversify in their current core markets and have strategies to combat digital disruption.”

PwC interviewed more than 2,800 family businesses in 50 countries, including 100 from the UK, between May and August 2016. Following the referendum in the UK on leaving the European Union, questions about the potential impact of Brexit on their businesses were added to the questionnaire; 1,145 respondents answered these questions.