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Posted on April 18, 2018 by staff

TMT sector remains most optimistic ahead of Brexit

The technology, media and telecommunications (TMT) sector is the most optimistic sector ahead of Brexit, according to the latest YouGov survey.

The Brexit Monitor has been commissioned by leading audit, tax and consulting firm RSM.

The quarterly survey of more than 300 UK middle market business leaders, 52 of which operate within TMT, also revealed that the sector had been the most consistently upbeat sector over the course of the survey that started nearly a year ago.

RSM’s Brexit Monitor index dictates that any reading above 100 indicates that businesses are more optimistic than pessimistic.

The survey showed that sentiment about the impact of Brexit on their own company over a two-year period rose from an index score of 114 in the last quarter, to 127, reflecting a considerable rise.

The index indicated an even greater increase in sentiment over a five-year period showing an index score of 107 in the last quarter, rising to 125.

TMT firms are also more confident about the UK government securing a ‘good deal’ than at any point since the survey began.

58 per cent of respondents were confident of the UK securing a good deal, well over double the number of those who weren’t (22 per cent).

In contrast, the consumer sector saw the most challenging conditions ahead for their industry, with an index score of just 90 over the short term.

Although a marginal improvement was shown over the longer term, it still remained in negative territory on 95.

“The sector is not impervious to political and economic challenges, but these findings do reflect a clear picture of confidence within the sector’s middle market,” said David Blacher, partner and national head of TMT at RSM.

“TMT continues to grow in scale, and as a by-product in confidence too, and these findings support that judgement.

“Whilst the implications of Brexit present a major factor for decision-makers, the sector’s agility, unlike some more traditional sectors, will undoubtedly help offset future challenges.

“Despite the political uncertainty and doubt surrounding our future relationship with the EU customs union, it would seem that the sector also remains largely confident about the government’s ability to deliver a good deal.

“That contradicts recent fears that the UK government is losing ground in its bid to secure a deal that is in the best interests of the UK.”

Whilst TMT stands out, it is the manufacturing sector that presents the most telling trend over the course of the survey.

The sector has displayed a steady decline in sentiment dropping from the second most optimistic (115) to the penultimate pessimist in the short term (100).

The longer-term picture also sees the sector drop from the most optimistic sector (117) to the least optimistic bar one, yet still in positive territory (108).

Over the course of the survey, companies in the Southern region have seen a marked decline in confidence over their own longer-term prospects.

They’ve dropped from the most optimistic region (116), to become the UK’s stand-out pessimist (95).