It’s tempting to analyze the global economy by scanning two separate snapshots: what it looked like before the Brexit vote and how it has performed in the months since the United Kingdom’s shocking decision to leave the European Union. But so far, it’s tough to detect many differences between the two portraits.

Last June, when a slender majority (52%) of British voters decided in favor of exiting the world’s largest trading bloc, the short-term impact could be summed up in a word: cataclysmic. How so? The Dow Jones plummeted more than 600 points in a day, UK Prime Minister David Cameron fell on his sword, and experts clung to a poorly named phenomenon known as” bregret” (or synonyms like “regrexit” or “bremorse”). Those terms suggested that those who voted in favor of leaving were guilt-ridden as they began to comprehend the political and economic chaos brought on by their woefully misinformed choice. Pre-Brexit, immigration so dominated the debate that the possible financial repercussions of abandoning the single market seemed hardly to register.

But the 17 million who voted in favor of Brexit—older, poorer, and less educated than citizens who gave it a thumbs-down—were also viewed as harbingers of a larger movement: a populist revolt, fueled by fury over globalization and technological change that would stuff its seething wrath into every available ballot box.

Such high-level drama hasn’t yet unfolded. Granted it’s only been a few months since the British breakup. And it’s true that the British pound has subsequently taken, well, a pounding and remains far below its pre-Brexit levels. But in the quarterly Duke/CFO Business Outlook Survey, which collected responses from more than 1,200 senior finance executives in September 2016, it’s difficult to find any trace of Brexit-induced panic. In some cases, the impact may involve certain events that didn’t transpire because of the vote—it played a role, for instance, in the Federal Reserve’s decision to delay an interest-rate increase.

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Setting a Date
In the survey, U.S. CFOs see an economic path ahead that is free of turbulence, with earnings growth predicted at 7.3% and revenue rising at an estimated 4.4% rate (see “Growing Ahead,” above). Their optimism about the economy, as rated on a scale from zero to 100, weighed in at 60.6, a slight rise over the quarter before. Asked specifically about how big an effect Brexit’s pace would have on their companies, most respondents expressed neutrality. Only 12% say they would prefer that the UK proceed slowly. It’s unlikely, of course, that the withdrawal of Britain, which ranks as the world’s fifth-largest economy, would happen at anything other than a prudent pace. Britain needs time, after all; it hasn’t conducted its own international trade for more than 40 years.

Among European CFOs, 31% of those surveyed prefer that Britain make a slow exit from the EU. Similar numbers of respondents predict that Britain will complete its withdrawal by the end of 2019; 54% put that date a year later. It’s understandable that neighboring CFOs would want Britain to proceed gingerly: 27% of CFOs at European firms say they expect their UK-based revenue to drop after the Brexit divorce is sealed.

Those firms also expect that the proportion of revenues coming from the UK will fall by more than one third, from 22% to 14%. For the next 12 months, however, Europe’s CFOs say that they expect earnings to grow by 5.2%, a precipitous drop from the 10.4% they foresaw in June (see “Slowing Ahead,” below).

Still, the UK—and maybe the rest of the world—would be wise to brace for the full impact of Brexit. The IMF predicts that the UK economy will grow at a 1.7% rate this year, having trimmed its forecast, post-Brexit, by 0.2%. Next year’s growth rate, according to the IMF, will shrivel to an anemic 1.3%. Given the abundant uncertainty regarding Britain’s trading relationship with the EU, it’s likely that business investment will drop. It’s only natural for big investors—and there is no bigger UK investor than the U.S.—to act guardedly as the UK comes closer to wrapping up negotiations over its departure. Trade with the UK constitutes just 0.5% of U.S. economic activity, but the oft-proclaimed “special relationship” between the two countries is unquantifiable.

Certainly, some industries will feel the heat sooner than others. In financial services, U.S. firms have typically used London as a gateway to the rest of Europe; needing a new regional hub, those companies will have to move elsewhere, perhaps to Frankfurt.

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Watching and Waiting
There is, in fact, a set timetable for how the Brexit will be executed—which may be what’s keeping uncertainty at bay and helping to prop up consumer confidence. Such predictability, whether or not it ends up reflecting reality, helps create the impression that the unprecedented process will nonetheless progress smoothly. A few months into 2017, the UK government is expected to invoke Article 50, formally kicking off a two-year negotiating period during which Britain and the EU will wrangle over the details of the exit terms.

The complexity of the negotiation is hard to fathom, encompassing everything from budgets to immigration policy to any new trade agreement that the UK can reach with the EU. Whether that range of issues can be settled in two years is an open question—one of many, including: Can that period be extended, if necessary? Is it acceptable for the parties to reach a transition agreement, acting on that even as they work on bringing a final agreement into focus?

This much seems certain: the longer and more drawn out the negotiations are, the more time foreign investors are likely to spend watching and waiting. As their uncertainty festers and grows through a long and grinding negotiation, it could very well trigger more visible negative events, including market see-sawing.

Britain’s economy only represents a sliver of the world’s gross domestic product, roughly 2.4%. But the EU, for example, is a major trading partner with both China and the U.S., which means those deals will have to be restructured. In any case, Brexit’s global impact will ultimately extend far beyond its trading footprint.

What lesson will the rest of the world take away from the Brexit decision? In the survey, 20% of European CFOs say that another country will opt to leave the EU within two years. And there are concerns that the spirit underlying the vote will spread, leading to widespread distrust of business leaders, politicians, and the status quo.

It can all sound quite dire. But in the preferred parlance that dominated so many discussions of the post-Brexit world—there was a bravalanche of them—only this much is sure: the full impact bremains to be seen.

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