Technology, media and telecommunications (TMT) is the most optimistic sector ahead of Brexit, according to a new survey.
TMT leaders also remain optimistic about the prospects of negotiating a good Brexit deal, according to the latest YouGov survey commissioned by audit, tax and consulting firm RSM.
This bullishness appears to contradict recent fears about a ‘no deal’ outcome and is revealed on the eve of this week’s EU Summit in Brussels.
RSM’s quarterly Brexit Monitor index, in which any reading above 100 means more businesses are confident than pessimistic, saw the TMT sector illustrate an upsurge in confidence on their own longer-term business prospects.
The sector rose from the least optimistic average index score of 101 in July to the most upbeat sector of all at 126 compared to manufacturing, financial services, construction and consumer.
TMT’s short-term sentiment also stood out as the most consistently upbeat, presenting an average score of 128, replacing manufacturing, which dropped to the second most optimistic sector with 113.
In contrast, the consumer sector saw the most challenging conditions ahead for their industry, with an index score of just 94.
The quarterly survey of more than 300 UK leaders of mid-market companies, of which 51 were made up by those operating within TMT, revealed that 40 per cent of TMT respondents were confident that the government could achieve a good deal.
This was almost double the 21 per cent who said they remained unconfident.
“Whilst the TMT sector is not impervious to political and economic volatility, these latest survey results are yet another illustration of a sector that continues to grow in confidence,” said David Blacher, partner and national head of TMT at RSM.
“Whilst the implications of Brexit present a major factor for decision-makers, there is a sustainable belief that the strength of this revolution in technology, coupled with the sectors adaptability, unlike perhaps more traditional sectors, will offset any frictional losses over both the short and long term.
“Despite the political challenges, as well as the TMT sectors aptitude to be agile to change, it would seem that the sector also remains relatively confident about the Government’s ability to deliver a good deal.”
Assuring the rights of EU citizens in the UK was the most important negotiation priority within the TMT sector at 43 per cent, followed by retaining free movement of people (39 per cent) and access to the single market without membership (31 per cent).
The three standout actions taken by TMT leaders were that immigration and employment legislation in anticipation for hiring EU nationals had been reviewed (42 per cent), EU supplier contracts had been reviewed or adjusted (41 per cent) and contracts for potential import/export duties with the EU had been adjusted (40 per cent).
The top three actions that TMT respondents still feel need to be taken were establishing EU subsidiaries or branches (29 per cent), reviewing or adjusting EU supplier contracts (25 per cent) and adjusting EU customer contracts (24 per cent).
Thinking about the sort of trade deal that all the mid-market firms surveyed would like to see with the EU once the UK has left, 22 per cent favoured the Canadian and Norwegian models respectively, 19 per cent the City State model and 17 per cent the Swiss model. Only 6 per cent preferred the Turkish model.