Has the UK’s tech sector shrugged off Brexit blues?

As featured in City AM - 07.03.2018
  • UK tech sector has the most upbeat outlook for business success for 2018
  • Owner managed businesses (OMB) in manufacturing and real estate also optimistic
  • Transport and logistics and healthcare businesses have a less positive outlook for the year ahead
Of 24 business sectors surveyed in our fifth annual Owner Managed Business report, Powered by people and technology in 2018, the UK’s technology sector has the most upbeat outlook for business success for the year ahead.

Despite uncertainty caused by the Brexit vote, rapid growth in the sector has allowed technology businesses to remain positive.

A healthy 68% of technology businesses are confident about meeting their profit targets this year. 75% have an optimistic outlook for the year ahead, compared to a 60% positive outlook for the coming year across all the companies surveyed.

The rapid growth and development of advanced tech categories such as AI, machine learning and the Internet of Things have helped to attract investment from private equity, venture capital and trade buyers.

Even following Brexit, 50% of the UK’s owner managed technology businesses say they plan to expand internationally. Additionally, 91% of the businesses surveyed hope to expand their UK customer base over the next year.

Mark Lamb, Head of Owner Managed Businesses, says: “Despite Brexit, the rapid innovation in the UK’s technology sector continues to attract higher levels of investment in tech businesses.

“This means business owners in the tech sector are understandably optimistic.”

Small businesses in key sectors remain confident about the year ahead

Despite the continuing uncertainty of how Brexit could impact them, the outlook among owner managed businesses in other key sectors also remains optimistic. Our survey finds that 64% of manufacturers have a positive outlook for 2018, followed by 56% of real estate businesses, and 53% of retailers.

As the UK’s economy remains strong, 61% of the manufacturers surveyed are confident that they will reach their profit targets in the coming year, compared with 56% of retailers and 60% of real estate businesses.

Meanwhile, some sectors feel that they may be hit harder by the effects of Brexit. Just a third of the transport and logistics businesses surveyed feel confident about their general outlook, and 26% of the healthcare businesses said they are confident about hitting their profit targets.

Mark Lamb continues: “In the wake of Brexit, many owner managed businesses fear they could find themselves at a competitive disadvantage, both in the short and longer term.

“Concerns such as restrictive import and export conditions and exchange rate volatility could come as a challenge to more materially based sectors such as manufacturing and transport and logistics.

“However, despite the uncertainty following Brexit and its consequent potential impact on trade, many small businesses remain resilient and retain their optimism for the future.”

Overall, owner managed businesses have become more optimistic in their outlook for the year compared with last year, rising from 57% to 60%.

To download your copy of our 2018 OMB report, please click here.

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