Eight out of 10 UK firms surveyed by the Confederation of British Industry (CBI) have said that Brexit has had a “negative impact” on their investment decisions.
Almost one in five also stated that the point of no return for triggering their plans has already passed.
The powerful UK business lobby, which surveyed 236 firms – representing 101 large companies and 135 SMEs – revealed the majority of firms will implement damaging contingency plans in the absence of greater certainty on Brexit by December.
Contingency plans include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.
“The situation is now urgent,” said Carolyn Fairbairn, director general of the CBI, who warned that as long as a ‘no-deal’ scenario remains a possibility, the effect is corrosive for the UK economy, jobs and communities.
The UK-wide survey comes as the Irish Government concludes a nationwide ‘Getting Ireland Brexit Ready’ roadshow, with more than 1,000 businesses due to attend a conference in the Convention Centre in Dublin on Thursday.
A seminar in Monaghan last Thursday, where three Government ministers heard that many Border firms had changed suppliers and have diversified to offset Brexit, was attended by 400 businesses.
Yesterday, Ms Fairbairn said the “speed of negotiations is being outpaced by the reality firms are facing on the ground”, adding a no-deal outcome will have severe implications for people’s livelihoods.
“Unless a withdrawal agreement is locked down by December, firms will press the button on their contingency plans. Jobs will be lost and supply chains moved,” she said. “The knock-on effect for the UK economy would be significant. Living standards would be affected and less money would be available for public services.”
Almost six out of 10 firms said they had formulated contingency plans, with one in five stating that the latest date to halt further implementation of contingency plans has already passed. Some 80pc of firms said that Brexit has had a negative impact, with almost seven out of 10 firms stating that Brexit has had an impact on the attractiveness of the UK as a place to invest.
“Uncertainty is draining investment from the UK, with Brexit having a negative impact on eight in 10 businesses,” said Ms Fairbairn.
The CBI said many firms won’t publicise their investment decisions, yet their impact will show in lower GDP years down the line.
The latest CBI Brexit preparedness survey was carried out between September 19 and October 8.