New research from Hitachi Capital Business Finance finds that a quarter (26 per cent) of SMEs in the media, marketing, advertising and PR sector will rely on the EU market (not including the UK) for potential growth in the next 12 months. However, more than half (55 per cent) do not see any opportunities for their businesses as a result of the UK voting to leave the EU.
The results show that the EU market was the next most important after the UK, which offered growth potential for 55 per cent of media SMEs. This was followed by North America (22 per cent), and Japan, East Asia and the Pacific (10 per cent). The percentage of media SMEs looking to the EU for growth was higher than other professional service sectors surveyed such as Law (19 per cent), and twice as high as SMEs in Financial Services (11 per cent), and Finance and Accounting (9 per cent).
When asked about the opportunities for their businesses as a result of the UK voting to leave the EU, just 40 per cent gave one answer or more, while only 15 per cent gave three or more answers.
At the same time, media SMEs were among the most likely of the 15 sectors surveyed to anticipate a period of decline in the next three months. This was the case for 16 per cent, with more than a third of these (6 per cent) saying they would struggle to survive.
The Brexit vote appears to have had a significant impact on confidence levels: the percentage of SMEs in this sector that anticipated growth in the next three months fell dramatically from 50 per cent in Q2 to 34 per cent in Q3 – a drop of 16 per cent.
With this, the percentage of those who anticipated decline in the same period increased slightly (16 per cent to 18 per cent). Since the vote, confidence levels have gradually risen to a similar level to those of a year ago, but not quite to the same levels of those before the vote.
Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance comments, ‘It is clear from these results, as well as anecdotally, that the media sector is less optimistic about the Brexit vote than others. What is encouraging is the percentage of those who are anticipating growth, as although this markedly fell by 16 per cent immediately after 23 June, it has since dramatically risen 11 per cent with a strong number of Media organisations positioning themselves to see significant expansion up until April .’
Further reading on media SMEs
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