Businesses in the West of England are sitting on cash reserves – but continued Brexit uncertainty will be economically damaging, warns the firm’s director of research and forecasting.
An end to the current Brexit impasse will “open the floodgates” to a spending spree from businesses in the West of England who are currently delaying investment decisions.
That was the prediction from Walter Boettcher, director of research and forecasting at global real estate advisor Colliers International, at a series of presentations to business leaders in Bristol.
During his talk, “Animal Spirits: Investment and the Brexit Transition”, Mr. Boettcher said there were large reserves of cash waiting to be released by businesses pending some certainty on the UK’s future relationship with the EU.
But he warned that a continued period of uncertainty and delay in Parliament would begin to inflict damage on the region’s economy in the coming months.
“A resolution to the uncertainty on Brexit one way or another would open the floodgates to an investment surge,” said Walter Boettcher.
“There is an awful lot of money sitting on the sidelines in the regions and some certainty would bring a tremendous boost to SMEs and supply chain businesses by releasing that pent-up investment. The result could then be a strong economic performance in the second half of 2019.
“However, the cash reserves that businesses are sitting on could be eroded over time if the current Brexit impasse is dragged out for too much longer.
“We are not in a bad situation yet but we could start to see problems developing – we have only missed out on the ‘upside’ so far but my fear is that the economy could begin to deteriorate soon.
“The good news is that Government finances are in better shape now so there is fiscal ‘wiggle room’ to support the economy if there is further delay.”