The United Kingdom is among the top 10 largest trading partners of the United States, accounting for about $100 billion in exports and imports so far in 2017. So the health of the British economy can have a significant impact for many U.S. businesses, both big and small. Good news: in 2018, things look like they’re going to be healthy for the British.
That’s the conclusion from a year-end survey conducted by a British manufacturer’s organization and the insurance firm AIG. The study found that 40 percent of those questioned were planning for growth this coming year while only 19 percent were expecting a downturn. The executives’ sentiments were buoyed by increased sales, job and profit numbers that were reported this past year. The weaker pound certainly didn’t hurt either. Many firms said they plan to spend invest in research and technologies to increase employee productivity in the near future.
“Manufacturers left 2017 in an upbeat mood and are set to outpace the rest of the economy again this year as the growth in global trade continues to gain momentum,” Stephen Phipson, the chief executive of the manufacturer’s organization said in a report from the Guardian. “That is not to say everything in the 2018 garden is rosy, however, as there are plenty of factors that could puncture this positive picture.
Phipson is, of course, talking about Brexit – Britain’s controversial plan to leave the European Union which he says has put the investment outlook on a “knife’s edge.” At the time of the survey (November, 2017) the first phase of exit negotiations had not been yet completed. And to be sure, British firms are definitely concerned about Brexit and its impact on the country’s economy, with a greater number of those surveyed (26 percent) foreseeing more risks than opportunities than was reported in the previous year.
Regardless, this is still good news for American businesses looking to do business in the U.K. But tread carefully: the risks for British companies surrounding Brexit – such as higher material costs, potential labor shortages and exchange rate volatility, remains high. Unfortunately, only a third of those firms surveyed had contingency plans in case there’s a “no deal” outcome.