When will it be over?
That was the collective response from many British businesses on Thursday after the European Union extended the deadline for the country’s departure from the bloc until Oct. 31, warding off a chaotic crash on Friday.
The extension, giving the government an additional six months to come to an agreement over the terms of its divorce, puts off the prospect of a no-deal Brexit and the expected devastating hit to the economy.
But even as the immediate pressure abated, businesses pleaded with politicians to come to an agreement swiftly and avoid being in the same position six months down the line.
Despite the uncertainty, the British economy grew by 0.3 percent in the three months ending in February, according to numbers from the Office for National Statistics released this week. But some of the activity may have been a result of frantic preparations to leave the European Union, and economists warned that Brexit could slow growth further.
For many of the larger businesses, Brexit has already happened. Banks have already set up shop overseas to continue serving their customers on the Continent. Carmakers have scrapped plans to develop more cars within the country.
And those who could afford to prepare for a no-deal separation will continue to do so, said the Confederation of British Industry, a business organization representing about 190,000 companies.
Food retailers will be focused on how to get perishable food into the country if Britain does leave at the end of October. Britain imports a higher proportion of its food in the cooler months, so the new date would come as sales of homegrown food would be slowing and imports ramping up in anticipation of Christmas.
“The end of October presents many of the same challenges that we had in March in terms of importing foods and a high reliance on the E.U. at that point,” Tom Holder, a spokesman for the British Retail Consortium, said.
Many companies, particularly small ones, have not had the spare cash or staffing to prepare for a potential overnight change in operating conditions, and have been simply hoping that a catastrophic no-deal would not happen. Now that the worst-case scenario has been put off, businesses of all sizes are still pleading for Parliament to give them clarity before the economy slows.
An extension to the negotiations “comes with costs and uncertainty,” Josh Hardie, the deputy director-general of the Confederation of British Industry, said in an interview. Businesses “place their bets on other countries” if Britain is no longer perceived as a gateway to Europe.
“That’s already happening — it’s not something that will just happen with Brexit,” he said.
Roni Savage, the director at Jomas Associates, an engineering consulting firm with 15 employees, has already seen the knock-on effect of the Brexit impasse.
Her firm surveys ground conditions for construction companies. Half of her construction clients, she said, have started slowing new projects, like housing, because it is not clear whether demand will hold up after Brexit.
“We get affected very quickly by issues with the economy, and Brexit is a huge one,” Ms. Savage said.
“It’s a nightmare,” she added. “I’m really saddened by having another extension, having to wait for longer. We’ll all be hoping to get this over soon.”
Farmers expressed the same concerns.
“We have crops and livestock in fields, with farmers and growers still in the dark about what trading environment they will be operating in, whether they will have access to a sufficient work force to carry out essential roles this season, or what the U.K.’s future domestic agricultural policy will look like,” Minette Batters, the president of the National Farmers’ Union, said in a statement.
Even an extension and a withdrawal agreement would be only the beginning of negotiations over Britain’s future relationship with the European Union, said Tim Durrant, a senior researcher at the Institute for Government, a think tank. “We’re in the long haul for Brexit, I’m afraid.”
The Federation of Small Businesses was blunt in its assessment of this prospect on Thursday: “Unless we get a political consensus, all a further extension does is create even more uncertainty, which is driving small firms to despair,” Mike Cherry, the national chairman, said in a statement.
About 60 percent of employees at private companies in Britain work at small and medium-size firms, or those with up to 250 employees.
“Lots of small businesses are in wait-and-see mode, and it’s not sustainable for that to go on indefinitely,” Alan Soady, a federation spokesman, said in an interview. “They will need time to adapt to whatever future trading conditions will be.”
In southwest London, Lars Andersen, the chief executive of My Nametags, a company of about 15 people that prints labels for children’s belongings, may have to open an office in the Netherlands if he is to maintain sales, 40 percent of which go to the European Union.
Like others, he was momentarily relieved, but he fretted about the prospect of waiting another six months to know whether he might have to set up shop in another country.
“We just have to be ready to jump, and that’s a bit scary,” he said.
He has been grappling with the issue for so long, he added, that Brexit is starting to feel “a bit like when you go to the dentist for a long operation.”
“Initially, you have all this adrenaline, and then you just hope it will finish.”
https://www.nytimes.com/2019/04/11/business/brexit-business.html
2019-04-11 18:11:15Z
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