In a very unscientific Twitter poll I conducted, one third of respondents said the Brexit would have a “very significant” impact on their business. Another third said it would have a “significant” effect, and the remainder was equally divided among “some,” “little” and “none.”
The arguments for leaving the EU fell into three main categories: sovereignty, economics and immigration.
1) Sovereignty: The UK didn’t want to be subject to EU regulations and laws, especially ones that supersede British laws. Many see the EU as being full of unelected officials imposing laws on them from afar. So much for a “United States of Europe.”
2) Economics: The “Leavers” don’t want to bail out or boost up failing European countries (Greece, anyone?). They also don’t want to pay for the EU administration.
3) Immigration: In perhaps the biggest objection to EU membership, Brexit voters didn’t want the incoming freedom of movement anymore. They feel it puts too much of a strain on resources, especially schools and the UK’s National Health Service.
So, now that it’s a done-deal, what’s next for your business?
1) Exchange rates: The British Pound fell more than 10% on Friday to $1.36, and the Euro fell about 2% to $1.11. Basically, your goods and services will be more expensive for UK and EU customers to buy…again in the short term. In my home state of Wisconsin, the UK is the fourth-largest export market for Wisconsin goods ($824 million worth of products shipped from here last year). Higher prices for these goods are bound to have some impact on sales. Check out your own state’s exports to the UK. Conversely, the US dollar, which was already very strong relative to other currencies, only got stronger.
2) Crude oil: Oil prices fell almost 5% on Friday because investors worried that the Brexit will slow down overall, global economic growth. Benchmark US crude dropped to about $47.50 a barrel. While a seriously volatile market, cheaper crude oil can be a good thing for buyers of petroleum-based substrates and other oil-based consumables for coating and printing.
3) Food and pharma: Also on the positive side, much of package manufacturing is for food products, and this can be true of pharmaceuticals as well. These particular markets are not as seriously impacted as more “optional” products – people have to eat, and also unfortunately become ill and need medicine. If your business is in these fields, the Brexit may hit less hard.
Most of the analyses I read over the weekend said it’s going to take time for the real impact of the Brexit to be felt, perhaps three years. But one thing is clear: With countries such as The Netherlands, France, Spain and Denmark thinking about reconsidering their EU membership via referenda as well, the whole EU concept may be up for grabs.
One thing I personally didn’t get: With such a significant thing as voting to leave the EU, why was it only a simple majority? You’d think 60% or a super-majority would have been required? The vote was just 51.9% in favor of leaving. Yes, it’s democracy, but some things require more than just 50% plus one.