Turns out that it’s having a pretty big effect.
There are already reports that the economy in general is almost taking a pause until the result of the referendum is known. Although we’re not really feeling that pause just yet here, the economic data coming out of various bodies and organisations do show a slowing.
Not only that, I was informed by a reliable source yesterday afternoon that at least four acquisitions/mergers/investment deals are currently on hold until the outcome of the vote is known. Some of these are big ones apparently.
Uncertainty a problem
If there is one thing that businesses in general hate more than anything else it’s uncertainty. And that is exactly what this upcoming vote is providing.
Although current opinion polls show a small lead for the Remain campaign, it’s certainly not a run away lead. And with just over a month to go, and a large chunk of the electorate still undecided, it’s still not a done deal.
If opinion polls were a little more one sided then perhaps these glazing sector deals waiting in the wings would be going ahead now, rather than after the vote. And it’s also worth remembering that the last set of opinion polls, at the last General Election, were very wrong.
Uncertainty also brings volatility and instability. You only need to look at the stock market in recent weeks to see big swings one way then the other. Sterling has also behaved in a similar pattern. Until we know the result, things won’t settle down. And depending on the result, conditions may become even more volatile.
Upheaval on “leave” vote
If Britain decided to leave, be in no doubt that the process to leave would be an enormous undertaking. There will be all sorts of political infrastructure that would need to be dismantled. Negotiations to actually leave the Union could take years. Deals would have to be done with the continent and the rest of the world to ensure economic continuity.
All of this would cause economic, stock market and currency volatility, this we can be sure of. And this will filter down to the UK economy and our own industry. If as a country we decide to leave, this would be something we would have to prepare for. We wouldn’t really have a case to complain, as we would have voted to go down this route in search of better fortunes in the long run.
There would then be the questions about these proposed four glazing industry deals. Would they go ahead in the end? Would they be put on ice until the new landscape was known? Would they be off the table altogether? Without knowing the details of the rumoured deals, we won’t know for sure until there is a result.
But, if you thought that the referendum wasn’t really having an effect on our industry, then you’d be wrong.
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Having survived several recessions with my window business from Ted Heath’s 3 day week , the winter of discontent, Margaret Thatcher’s dismantling of the ‘old industries’, the introduction of VAT on home improvements in 1984 ( a dustbin lid moment) , the exit from the ERM with John Major and Black Wednesday ( i.e. 15% interest rates) , all sorts of crisis re the exchange rate, strikes, various wars, 9/11, the IRA, etc etc the prospect of us leaving the EU ( if indeed that happens) shouldn’t worry people to much. As always the immediate effect of all of those… Read more »
I’ve no doubt you’re absolutely right about the effect that it is having Jason and that some big decisions are ‘on hold’ as a result; what on earth is wrong with us? We should thrive on uncertainty surely? You wouldn’t go to a football match if you already knew the result, or buy a new album if you already knew exactly what tracks were on it and exactly what they would sound like? (Apart from the people who buy the ‘Now That’s What I Call Music’ series because they are not very well anyway and the people who buy historic… Read more »
Hi Alan Thanks for your comment! I think as a nation we’re quite reserved. We choose to worry and withdraw generally, rather than be like, as you say in your comment, thriving when times are uncertain. Perhaps a factor that people seem to forget that to actually leave the EU will take years. These deals that are reportedly on hold could be done way before we left, which would give chance for those businesses to adapt to the new upcoming conditions. I don’t really see a solid reason as to why these deals can’t be done now. But hey ho!… Read more »
Jason, Phils answer was like a tour through the last 40 years of political history….I think he makes very good points.
I think ‘big business’ will want to stay in, but just thinking about our industry for a second all of the smaller local installers are supllied by ‘big’ system co’s/fabbers etc so I think it should be in all sizes of businesses interests to stay in.
However, I think a lot of individuals are minded to vote LEAVE and the final result is very very finally balanced……..
Thanks for your comment Mark
I agree with you and Phil about big business wanting to stay in. But, my brother and myself were talking yesterday, that we don’t really know a single person that intends to vote to remain. Everyone we have spoken to so far have said they’re voting to leave. It makes me wonder how accurate current opinion polls actually are.
DGB
I think you’ve got some good points again and I agree with Phil and Alan on their respective points also…. Personally I think Euro 2016 will have more of an impact as most large sporting events do… Where will your builders and fitters be when England are playing?