Brexit may lead to exodus of U.K. firms: survey

Nearly a third of U.K. firms may shift their operations abroad because of Britain’s looming departure from the European Union, a survey of 1,200 company directors suggested Friday, as the political stalemate over a Brexit deal heightened jitters among businesses.

The survey by the Institute of Directors, an employers’ group, found that 16% of businesses already had relocation plans while a further 13% were “actively considering” a move.

The group said while headlines have focused on big companies, less notice has been given to smaller U.K. businesses and their plans to relocate.

Institute interim director Edwin Morgan said smaller firms typically have tighter resources and for them “to be thinking about such a costly course of action makes clear the precarious position they are in.”

Britain is due to leave the EU on March 29, but a Brexit divorce agreement struck between British Prime Minister Theresa May’s government and the bloc late last year as been rejected by Britain’s Parliament.

U.K. lawmakers voted this week to send May back to Brussels to seek changes to the divorce agreement. But the EU is adamant that the deal cannot be renegotiated, leaving Britain lurching toward a cliff-edge “no-deal” departure from the bloc that many businesses fear will cause economic chaos.

A survey of companies released Friday showed that manufacturing firms stockpiled goods at a record rate in January to prepare for potential Brexit disruption to trade.

The survey of about 600 U.K. manufacturers by the market research company Markit and the Chartered Institute of Procurement and Supply found that inventories of finished goods rose sharply, while optimism in the sector was at a 30-month low and jobs were starting to be cut.

Senior government ministers have suggested that Britain may have to seek a delay to Brexit to make time to find a solution.

International Trade Secretary Liam Fox said Friday the government was “still aiming to get to the 29th March—that’s the date we promised the British people.” But he suggested there could be “a short delay” if Britain and the EU “had reached an agreement and needed the legislation to implement it.”

A delay would need the approval of the 27 remaining EU states. Ireland’s Europe Minister, Helen McEntee, said the bloc would likely agree, as long as Britain had a good reason.

Jill Lawless and Danica Kirka, The Associated Press

Jill Lawless and Danica Kirka are reporters with The Associated Press,  an American not-for-profit news agency headquartered in New York City and founded in 1846.