Wednesday 5th Apr 2017
- 55% of SMEs in the media, marketing, advertising and PR sector do not see any opportunities for their business as a result of UK leaving EU
- One in four (26%) of these media SMEs are reliant on the EU market for growth
- One in six (16%) media SMEs scaling back or struggling to survive
- Confidence levels gradually recovering following dramatic drop immediately after Brexit vote
New research from Hitachi Capital Business Finance has found that a quarter (26%) 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%) do not see any opportunities for their businesses as a result of the UK voting to leave the EU.
The results showed that the EU market was the next most important after the UK, which offered growth potential for 55% of media SMEs. This was followed by North America (22%), and Japan, East Asia and the Pacific (10%). The percentage of media SMEs looking to the EU for growth was higher than other professional service sectors surveyed such as Law (19%), and twice as high as SMEs in Financial Services (11%), and Finance and Accounting (9%).
When asked about the opportunities for their businesses as a result of the UK voting to leave the EU, just 40% gave one answer or more, while only 15% 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%, with over a third of these (6%) 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% in Q2 to 34% in Q3 – a drop of 16%. With this, the percentage of those who anticipated decline in the same period increased slightly (16% to 18%). 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% immediately after 23 June, it has since dramatically risen 11% with a strong number of Media organisations positioning themselves to see significant expansion up until April.”
Media SMEs outlook over the next three months
|
|
2017 |
2016 |
|||
|
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
|
|
Significant expansion |
8% |
3% |
3% |
5% |
7% |
|
Modest organic growth |
37% |
39% |
32% |
45% |
38% |
|
Stay the same/ no change |
39% |
38% |
46% |
33% |
35% |
|
Contract/ scale down |
10% |
9% |
15% |
13% |
11% |
|
Struggle to survive |
6% |
6% |
3% |
3% |
7% |
|
Net Growth |
45% |
43% |
34% |
50% |
45% |
|
Net Decline |
16% |
16% |
18% |
16% |
18% |