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
Modest organic growth
Stay the same/ no change
Contract/ scale down
Struggle to survive
The findings are from the quarterly Business Barometer by Hitachi Capital Business Finance, which tracks continuity or change in SME confidence across the UK.
2017 – Q1 figures: The poll asked 1,213 SME decision makers what their business outlook was for the three-month period to the beginning of April 2017, which regions offer potential growth for business over the next 12 months and what opportunities there will be as a result of leaving the EU.
2016 – Q4 figures: Total sample size was 1,006 Decision makers in small businesses. Fieldwork was undertaken between 3rd - 11th October 2016. The survey was carried out online. The figures have been weighted and are representative of business size.
2016 – Q3 figures: Total sample size was 1123 adults. Fieldwork was undertaken between 11th - 20th July 2016. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
2016 – Q2 figures: Total sample size was 1139 Decision makers in small businesses. Fieldwork was undertaken between 4th - 13th April 2016. The survey was carried out online. The figures have been weighted and are representative of business size.
2016 – Q1 figures: Total sample size was 1178 decision makers in Small Businesses. Fieldwork was undertaken between 11th - 22nd January 2016. The survey was carried out online. The figures have been weighted and are representative of company size.
Hitachi Capital Business Finance, a subsidiary of Hitachi Capital (UK) PLC, provides business asset finance to over 25,000 customers across the UK, powering both SMEs and bigger corporations to meet their goals and grow. Working across multiple sectors, the business provides a full range of funding options through brokers, vendors and online direct to SMEs. This includes hire purchase, operating lease, finance lease solutions and block discounting.
Hitachi Capital (UK) PLC is a leading financial services company with over 30 years’ experience providing innovative finance solutions to enable consumers, SMEs, fleet owners, motor dealers and retailers to grow and prosper. Hitachi Capital has over 1,200 employees, nearly £4bn of assets and over 1 million customers across its four business units; Consumer Finance, Vehicle Solutions, Business Finance and Invoice Finance.
Hitachi Capital is a wholly owned subsidiary of Hitachi Capital Corporation, one of Japan’s largest non-bank financial institutions. Hitachi Capital Corporation is part of Hitachi Limited, the global manufacturing and technology firm. Manufacturing continues to be a key part of Hitachi Capital’s DNA, delivering complex products to high levels of customer satisfaction. Its corporate clients include some of the UK’s leading companies such as British Gas, Royal Bank of Scotland, B&Q and John Lewis.