US INVESTORS ARE CONFIDENT IN THE UK, BUT CONCERNSOVER FUTURE UK-EU RELATIONSPERSIST
A new surveypublished today byBritishAmericanBusiness and Bain & Companyfindsthat business confidence is high forUScompanies intheUK,butfuture confidencemaylargely depend onthe UK’s relationship withthe EU.
LONDON –July,12, 2021–Today,BritishAmericanBusiness and Bain & Companylaunchedthe inauguralTransatlanticConfidence Index.TheIndexmeasurestheconfidenceof US companiesactivein the UK,including their views oninvesting in UK operations over the nexttwotothreeyears and in the overall health of the UK’s relationship with both the US and the EU.
BritishAmericanBusiness and Bain & Company surveyed 68large capAmerican companies representing a combined 3,500 years of business experience and employing more than 275,000 individuals across every region of the UK.
The report can be found ,and the full analysis can be accessed .
US companies expressedveryhighconfidencein the UK as a destination for business, with a positive outlook for futureinvestmentdespite the challenges of theCovid-19pandemic and the uncertainty surroundingthe country’s exitfrom the EU. However,the survey results also reveal thatmanyexecutivesare concernedaboutthecurrentstate of UK-EUrelations. They worrypolitical tensions and practical matters such assupply chain problemsandthe ability to accesstalentfrom the EU could overshadow the outlook for the future.
Among the key findings of the survey:
- About one-third of respondentsratedtheir confidence at level 9 or 10
- About 60% of respondents plan to increase their investment in the UK over the next two to three years
- Nearly 40% of all surveyed companies said the UK’s number one priority should be improving the political and economic relationship with the EU if they want the UK to maintain its top ranking as a destination for US investment
- Almost 80% of respondents reported a confidence score for the UK-EU relationship of 6 or lower, compared with only 20% for the UK-US relationship
- Only 17% of all US companies surveyed reportedrelocating jobs to the EU so far
Respondentsratedoverall confidencein the UKa7.8 on a 10-pointscale andidentified the country’s most important assetssuch asthe UK’sstable and predictableregulatoryenvironment,itsopenness when attracting talentfrom abroad, anditsstrong academic andR&Drecords. Despitedifficultiesaround the UK-EU relationship, whichareimpacting supply chain logistics and access totalent,about60% of respondentssaid they plannedto increase investments in the UK over the nexttwo to threeyears.
Asked whatthey would recommend for the UKto maintain its top ranking as a destination for US business,companieshighlightedimproving the political and economic relationship with the EU. The second most important priority was finalising negotiations for the US-UK Free Trade Agreement,which havecurrentlybeenput on hold.Other top recommendationsfor the UK Governmentincludedprovidinggreater clarity arounditsindustrial strategy and maintaining a business-friendly corporate tax environment.
“The UK is very well-positioned to continue to attract companies from the US and from around the globe” says Duncan Edwards, Chief Executive of Ƶ. “But this positive outlook will be enhanced by a comprehensive trade deal with the US, a more positive political and trading relationship with the EU, and more business-friendly domestic policies.”
Respondents viewed thehealth of theUS-UK trade and investmentcorridor favourably,ratingit on averagea7out of 10, which should improve in the event of a trade agreement.However,that confidence level drops to 5 when discussing the UK-EU relationship.
Respondentsassessedthe largest impact of the UK’s exit from the EU to beonsupply chainsbecause of‘red tape’ issues, followed closely by the ability to recruit and move talent between the UK and the EU. Regulatory barriers, loss of ability to perform certain services in the EU, and tariffsrounded out the list of impacts.
“It isencouragingto see that US businessesstillvaluethe UK ashub for innovation,”says Jonathan Frick,a partner at Bain & Company based in London.“Overall, US investorshave maintainedthe majority oftheir workforcessince the country’s exit from the EU and in particular, financial services firms believe the City will remain a hub for the business community with a broad and diverse talent pool.”
Editor’s Note: To arrange an interview,pleasecontact
BritishAmericanBusiness
Dominic Parkeratdparker@babinc.orgor020 7290 9882/+44 7500 115352
Bain & Company
Contact Aliza Medina at aliza.medina@bain.com or +44 207 969 6480
AboutƵ
BritishAmericanBusiness is the leading transatlantic trade association incorporating the British-American Chamber of Commerce in the US and the American Chamber of Commerce in the UK.
We are committed to strengthening the economic corridor between the United States and the United Kingdom by supporting policies and action that protect and enhance the environment for transatlantic trade and investment.
We convene and serve a growing network of companies and business leaders through networking opportunities, bespoke programming and marketing platforms.
We actively promote trade and investment and support those who make the transatlantic corridor part of their business growth ambition.
For more information, please visitwww.babinc.org
About Bain & Company
Bain & Company is a global consultancy that helps the world’s most ambitious change makers define the future.
Across 61 offices in 38 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today’s urgent challenges in education, racial equity, social justice, economic development, and the environment. We earned a gold rating from EcoVadis, the leading platform for environmental, social, and ethical performance ratings for global supply chains, putting us in the top 2% among other consulting firms. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.