BDO: Brexit impact worse than expected for 26% of mid-market groups

Some 26% of mid-sized businesses believe the impact of Brexit has been worse than expected, according to the latest survey conducted by BDO. 

The bi-monthly tracker, which monitors companies with revenues between £10m and £500m, found that 38% of respondents felt the outcome was better than anticipated, while 36% said it matched expectations. 

Overall, 46% of mid-market companies described the impact as negative, compared with 54% who reported a positive effect.

Regulatory complexity and red tape emerged as the most significant challenges. Among firms reporting a negative impact, 42% cited import and export compliance as the most affected area.

The pressure is unevenly distributed across sectors, according to survey findings, as the issues were felt most acutely by 41% of construction firms and 27% of manufacturing businesses.

Skills shortages have also intensified since the referendum. Nearly a third of businesses reported struggling to recruit professionals with international trade and cross-border compliance expertise.

Employers also experienced increased difficulty recruiting and retaining staff from the EU due to visa requirements, higher costs and bureaucracy having created new barriers.

According to BDO, the 500 mid-sized firms who participated in the survey contribute over £1.8tn in revenues to the UK economy, which is equivalent to more than half of domestic GDP.

Prior research from BDO estimated that mid-sized businesses will contribute £745bn to UK gross value added by 2028, compared with £545bn in 2023.

Richard Austin, partner at BDO, said: “For many mid-sized businesses, Brexit has proved more difficult than expected – but it has not happened in isolation. Over the past decade, firms have faced a relentless series of shocks, from the Covid-19 pandemic to geopolitical conflicts and ongoing political uncertainty in the UK.  

“This has created an exceptionally tough environment for businesses. However, the resilience of the UK mid-market has been remarkable. These businesses have continually adapted in the face of significant disruption over the last 10 years. Their ability to evolve despite prolonged uncertainty underlines the critical role they play in supporting economic stability across the UK.”  

He added: “We know mid-sized companies have the ambition and potential to scale, invest and create jobs. If the UK is serious about driving long-term growth, these businesses need targeted support to help them navigate these challenges, unlock investment and compete on the global stage.”