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More than half of large US companies with operations in the UK expect to increase investment in the coming years despite concerns about the lack of a trade agreement between countries i Britain’s exit from the EU.
A survey of 68 large-cap American companies employing more than 275,000 people in the UK found “very high” confidence in the country as a place to do business. About a third rated confidence at the highest levels, while about 60% said it would increase investment in the UK.
The survey, which was conducted by the US-UK trade association BritishAmerican Business and consulting firm Bain, covered companies in sectors such as financial services and manufacturing up to technology, media and telecommunications. Respondents included companies such as insurance group Marsh McLennan and payment company American Express.
“The combination of a strong and multilingual talent base, a supportive business environment and geographical and time zone advantages continues to make the UK an ideal starting point for our operations outside the US,” said Anna Marrs, President of the group on American Express.
Dan Glaser, president and CEO of Marsh McLennan, was equally bullish. “The UK is a large and dynamic economy with excellent regulatory and educational systems,” he said. “The best talent in the world wants to work and live in Britain.”
But the survey also found that there were concerns about Brexit and US trade relations between US companies with large operations in the UK.
The main concerns about Brexit were the risk of political tension, as well as practical issues such as supply chain problems and the ability to access EU talent. Regulatory barriers, loss of capacity to provide certain services to the EU and tariffs were also marked.
About 17% of US companies surveyed said they had relocated jobs to the EU.
U.S. companies that responded to the survey, which is expected to become an annual indicator of U.S. investment intentions in the United Kingdom, warned that these concerns about Brexit could overshadow their prospects for future.
Nearly 40% of companies said the top priority should be to improve the political and economic relationship with the EU so that the UK maintains its top ranking as a destination for US investment.
“The UK is very well positioned to continue to attract companies from the US and around the world,” said Duncan Edwards, CEO of BritishAmerican Business.
“But this positive outlook will be reinforced by a global trade agreement with the US, a more positive political and trade relationship with the EU and more appropriate domestic policies for business.”
According to the survey, the other major priority for US companies was for Washington and London to finalize negotiations for a trade deal. Liz Truss, secretary of international trade, will travel to the U.S. this week to meet with officials, according to people familiar with the matter.
Other recommendations for the UK government include providing greater clarity on its industrial strategy and maintaining a business-friendly tax environment.
Jonathan Frick, Bain’s partner in London, said US investors had kept most of their staff since the UK left the EU. “In particular, financial services companies believe the city will continue to be a hub for the business community with a wide and diverse talent pool,” he said.
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