ECI Partners’ 2015 Growth Survey has found that over nine in ten growth companies said they wish to remain in the EU, with only 6 per cent supporting the idea of a ‘Brexit’. Over half said leaving the EU would actively damage their business.
The industrials sector is the most Eurosceptic group of companies, with 23 per cent saying they would support an exit, compared to just 5 per cent in financial services and 1 per cent in technology and telecoms. By region, Scotland and the north east were the most Eurosceptic, with London and the North West being the regions most supportive of EU membership.
The same survey reveals that growth companies are still plagued by skills shortages which present a long-term challenge for businesses. 91 per cent of businesses reported struggling with skills shortages with IT and Sales & Marketing skills most in demand.
Almost half of companies would welcome tax incentives for investment in staff training to help address the problem and boost productivity.
However, slow growth in Europe and the strong pound are hindering exports, as 27 per cent of companies don’t expect to grow outside the UK in the next 12 months. The number of companies seeing sterling strength as a barrier to exporting rose from 24 per cent in 2014 to 34 per cent in this year’s survey, and over three quarters of growth businesses in the industrials sector cited the strength of sterling as a key barrier to growing exports.
However, the funding landscape has improved. A record high of 73 per cent of growth companies expect it to be easy or very easy to secure finance. Only a quarter expected it to be difficult, down from a third in 2014. Businesses in the North East are the most confident about accessing finance with three-quarters not anticipating difficulties in the next year.
Growth businesses are increasingly looking to private equity to fund growth with 69 per cent considering this source of finance – a record number and up from just 40 per cent in 2011.
However, manufacturers are still struggling, 43 per cent say it will be difficult or very difficult to obtain funding.
Danny Alexander, former Chief Secretary to the Treasury, said: “ECI’s research gives us clues as to why fast growing businesses, the real drivers of our economic recovery, are so overwhelmingly pro-Europe. Exporting businesses see Europe as a key market. Firms facing skills shortages can recruit across the EU.
“Many foresee the negative consequences of Brexit for their businesses. To thrive in a competitive global economy, I believe that Britain needs to be fully engaged in Europe.”
