The upcoming Brexit referendum on the 23rd June is looking too tight to call. As a forward looking business, Mid Group have been trying to understand the impact that either result might have on our business.
However, with the varying quality of facts being traded by either side, it sometimes seems almost impossible to predict what may happen.
Remain or Leave?
There doesn’t seem to be much argument or even debate about what would happen in the event of an “In” vote, suggesting the UK would continue on as it currently is. This is not, in our opinion, a bad position, with record low unemployment, a jobless count that would have other countries green with envy and a standard of living above most other nations in the world.
From an Academic perspective, there seems to be a general consensus that new investment will be dampened in the event of a “Leave” vote, whilst the terms of a Brexit are negotiated, as investors do not like uncertainty. This negotiation may take up to two years and sounds like a period of short to medium term pain.
Impact of Brexit
The short term pain is likely to include a fall in the value of the pound, which would actually help our exports, but would make imports that we are heavily reliant on more expensive. In an ideal word this would result in more inward investment and job creation in the UK, but, with uncertainty that may not be the case.
Once a Brexit takes place, the potential outcomes appear to vary as much as the “facts” generated by either side of the debate. We can only assume that the outcome will very much depend on the quality of the negotiation and the terms the UK agrees with the remainder of the EU.
Which neatly brings us on to the position the UK has with the remainder of the EU. Would the EU want to make it difficult for the UK to leave to dissuade other, would be, leavers from following the same path? Or alternatively, would the EU be on the front foot and put forward excellent terms, ensuring its relationship with the UK remains positive?
Striking a trade deal?
A good negotiation and Brexit may result in the UK being cut free of some of the challenges that the European Union creates, allowing the economy to grow unhindered by red tape and bureaucracy.
The nature of the outcome would be governed by those negotiating on either side, and given this would be happening over the coming two years, we cannot be certain who that will be, or, what their agenda will be.
It appears that like any break-up, emotions and how well they are controlled may play a large part in determining how well the parties part.
Our view? It is a tricky one to call; the EU offers many excellent benefits to the UK that are often underappreciated and the likely short term shock to the UK economy will probably cause our business some short term pain. But is there a longer term potential upside?
The Mid Group
Mid Contracting and Consulting is the UK trading business of the Mid Group, focused on the delivery of new projects using the best in off-site construction methods and modern technology.
The Mid Group is a dynamic construction, investment and development company, dedicated to providing enhanced value for clients and partners across the UK and Middle East through innovation and professionalism.
For more information visit www.Mid-Group.co.uk.