Darkness for business as politicians seek light at end of continuous Brexit tunnel
Stewart Nicol, Chief Executive, Inverness Chamber of Commerce
Brexit was already a major issue for businesses across the country, but the European elections and the Prime Minister leadership contest has only deepened the crisis.
The polarised election result and the race for No 10 has piled further layers of uncertainty onto the already unsettling and divisive situation.
As we head towards the next Brexit deadline on 31 October, indecision and political posturing is increasingly costing jobs, business closures and delays or u turns in investment.
The recent British Chambers of Commerce Quarterly International Trade Outlook highlighted a growing number of UK exporters reporting a decrease in orders in the opening quarter of the year, with cashflow and confidence dropping among many exporters in the lead up to Brexit.
Based on the responses of over 3,400 exporters, it showed a clear weakening of sales and orders in the opening quarter of the year, with one in five manufacturers (23%) and service firms (20%) seeing their export orders drop in the first three months of the year – the highest for both since the second quarter of 2017.
At the same time, the latest Scottish Chambers of Commerce Quarterly Economic Indicator survey showed key Scottish industrial sectors had experienced an investment slowdown against the backdrop of an uncertain global environment and the cloud of Brexit hanging over the UK economy.
In the key tourism sector, a net balance of tourism firms reported a fall in the number of customers compared to the same period one year ago. Visitors from the EU fell by 25% and from the rest of the world by 11%, while there was also an 11% downturn in investment by tourism businesses.
The prospect of a no-deal Brexit has undoubtedly affected business confidence in Scotland in the first quarter of 2019. The fact that the Brexit Party won the most seats in the European Parliament elections in the UK is also ominous as it means the next Prime Minister will almost certainly to be a hard Brexiteer and will support leaving without a deal.
However, even a swift leadership contest may not end the impasse. Collectively, the pro-Remain parties in the UK won the biggest share of the vote in the Euro elections, which could yet lead to a General Election and a second EU referendum.
So, as the politicians continue to grope about in the never-ending Brexit tunnel, businesses are growing increasingly concerned that the prospect of any illumination will not be imminent.