Brexit a Month On – Other Risks and Uncertainties to the Fore

Brexit

We enjoyed Andrew Daley's article we published last week surveying the procurement recruitment market a month on from Brexit. He was broadly positive given what his firm are seeing in that space, and we have also heard some stories of consulting assignments being confirmed and organisations moving ahead positively in terms of technology investment.

The attitude might be that now at least the uncertainty has gone, so we all need to get on with life, business and everything, as it were. The decline of the £ has helped exporters, and whilst house prices in London might be moderating, that is probably a good rather than a bad thing.

The newspapers that were pro-Brexit are putting a positive spin on matters, highlighting investment decisions from the likes of GSK and McDonalds. But the Remain media camp (like the Guardian) see the initial signs of doom, for instance in the Markit/CIPS surveys of firms' purchasing managers which suggested activity in both the UK’s services and manufacturing sectors slipped into contraction in the wake of the vote.

The truth is it is far too early to say what economic effect Brexit will have on the UK and indeed countries more widely. For procurement practitioners, the message can only be to stay open-minded and consider a range of possible developments when you do your risk assessments, business plans and commodity forecasts.

But to some extent, the Brexit issues have been overshadowed by the terrible events in Germany and France, with various violent attacks carried out by deranged IS supporters (and the odd deranged non-IS supporter), as well as the attempted coup in Turkey.  There was an excellent article by Alice Thomson in last Wednesday's Times - behind the paywall unfortunately - pointing out that the attacks form part of an issue that involves mental health questions as much as terrorism, and that rings true. But if IS can enlist the sick as well as the disaffected and murderous, then we're all in trouble.

A continuation of this wave of attacks would drive big political and social changes in Europe, which will in turn have effects on business. For instance, a rise in nationalism and political parties of that ilk may well lead to greater protectionism in business terms, and more pressure for organisations to buy locally and nationally.

That's a potential macro effect, if you like, but day to day we might see more constraints on free movement, more hassle and security at various locations from airports to concerts. Good news for the videoconferencing and telecoms sectors and social networks perhaps - although ironically, just as "going out" seems to have got more dangerous, Pokémon Go has proved people will do that rather than just sit indoors playing games if you give them a good incentive!

So where are we going with this?  Just to say our suspicion is that Brexit is not going to be the biggest issue in our lives in the immediate future. And that effective risk identification, analysis and management - including supply chain related risks - will be more important than ever for all organisations in the coming years.

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