Majority of companies still waiting to pull the trigger on Brexit preparations, according to survey

A majority of companies have made no changes to their business plans ahead of Brexit, according to research.

The Bank of England’s (BoE) regional agents asked 369 companies in October and November whether they had made changes to their supply chains, set up new legal entities or relocated office ahead of either a no-deal scenario or a transition deal, but found less than a third had sprung into action.

Services companies led the way, with nearly half having taken action already, while nearly 70 per cent of construction firms had made no changes at all.

The report said aerospace and car production companies were among the most concerned about how their business models would be affected, because of their highly integrated international supply chains.

BoE analysis said this may reflect caution about committing cash flow to preparations “until it is absolutely necessary”, with companies needing “more clarity on the potential Brexit outcome” before acting.

Fewer merger and acquisition deals were forecast by professional services companies, as businesses hold tight until they know how Brexit will affect the economy.

Analysis also calculated that companies expected employment to fall by between two and five per cent if the UK crashes out of the European Union without a deal, while an increase of up to one per cent was forecast if a deal and transition period are agreed.

Road haulage companies reported they were concerned EU driving permits would be in short supply in the event of a no deal. In this scenario, haulage firms would require European Conference of Ministers of Transport permits to drive in the EU, but said the UK’s current allocation of these was “very low” relative to the number needed.

They expected activity to be higher than usual in January and February as companies rush to stockpile and export goods before the leaving date at the end of March, the report added.