Supplemental ISM Report On Business® Brexit Report
ISM Addresses Economic Concerns on Historic Brexit Event through ISM Report On Business® Brexit Report to Be Released on July 1, 2016.
TEMPE, Ariz., July 1, 2016 /PRNewswire/ -- Last Thursday, June 23, 2016, the electorate of the United Kingdom voted to withdraw from the European Union. The final tally was 52 percent voting to leave the European Union and 48 percent voting to remain a member of the European Union. This largely unexpected result rattled markets. The next trading day, Friday, June 24, saw the Dow Jones Industrial Average open lower and close down almost 600 points. Although markets have recovered somewhat since Monday, a sense of unease persists.
"Great Britain's vote to leave the European Union is historic," said Thomas W. Derry, Chief Executive Officer of Institute for Supply Management. "We saw that polling our manufacturing and non-manufacturing Business Survey Committees might provide important information to the markets with regard to how procurement executives view their business prospects for the remainder of the year."
The survey found that, while most procurement executives do not foresee major disruptions, many are cautiously watching the situation closely and believe Brexit will hamper growth.
When asked to project what could be the net financial impact of Brexit on their organization, a majority believed Brexit would have a negligible impact on their firm. About one in three surveyed thought their firm would be negatively, or slightly negatively, impacted. Only a small proportion (less than 10 percent) felt their business would be positively, or at least slightly positively, impacted by Brexit.
| For the remainder of 2016, due to Brexit, what do you expect to be the |
||||
| Composite |
Manufacturing |
Non- |
||
| Negative impact |
6% |
7% |
6% |
|
| Slightly negative impact |
27% |
31% |
26% |
|
| Negligible impact |
61% |
58% |
61% |
|
| Slightly positive impact |
4% |
4% |
4% |
|
| Positive impact |
2% |
0% |
2% |
|
Among those projecting a negative impact, it was reported that changes in the exchange value of the dollar could be the most direct cause of their challenges. Changes in global demand is seen as a secondary cause and a change in demand for goods and services by their customers in the United Kingdom is seen as a possible, though somewhat unlikely, reason for not meeting expectations.
| Do you expect the net negative financial impact to largely result from ... |
||||
| Rank each item. "1" is most impactful. "4" is least impactful. |
Manufacturing |
Non-Manufacturing |
||
| % Rank 1 |
Average |
% Rank 1 |
Average |
|
| Changes in the exchange value of the dollar |
51% |
1.7 |
43% |
1.8 |
| Changes in demand globally |
30% |
2.1 |
27% |
2.1 |
| Changes in demand by customers in the United Kingdom |
14% |
2.4 |
20% |
2.6 |
For the remainder of 2016, procurement executives indicated that they were most concerned about financial market uncertainty and currency movements. Secondarily, they were concerned about overall global growth. Supply management executives were least concerned about their firm's trade links with the U.K. and EU.
| For the remainder of 2016, is your firm concerned about the impact of Brexit |
|||
| Financial market uncertainty |
|||
| Composite |
Manufacturing |
Non- |
|
| Not concerned |
12% |
10% |
12% |
| Somewhat concerned |
62% |
65% |
61% |
| Very concerned |
27% |
25% |
27% |
| Currency movements |
|||
| Composite |
Manufacturing |
Non- |
|
| Not concerned |
29% |
19% |
31% |
| Somewhat concerned |
48% |
55% |
46% |
| Very concerned |
23% |
26% |
23% |
| Global growth |
|||
| Composite |
Manufacturing |
Non- |
|
| Not concerned |
33% |
28% |
33% |
| Somewhat concerned |
51% |
57% |
49% |
| Very concerned |
17% |
15% |
17% |
| Your firm's trade links with |
|||
| Composite |
Manufacturing |
Non- |
|
| Not concerned |
55% |
44% |
58% |
| Somewhat concerned |
34% |
45% |
32% |
| Very concerned |
11% |
11% |
11% |
A strong majority of those queried believed Brexit would have a negligible impact on their capital spending plans. Fewer than one in five respondents expected that their capital budgets would be negatively impacted. Only a very small proportion of respondents saw Brexit as spurring their capital budget.
| For the remainder of 2016, due to Brexit, what do you expect to be the |
||||
| Composite |
Manufacturing |
Non- |
||
| Negative impact |
4% |
4% |
3% |
|
| Slightly negative impact |
13% |
10% |
13% |
|
| Negligible impact |
81% |
84% |
81% |
|
| Slightly positive impact |
1% |
2% |
1% |
|
| Positive impact |
1% |
0% |
1% |
|
Supply management executives were asked if their firms were likely to respond to the vote by employing various tactics to slim down or downwardly manage their workforce. Overwhelmingly, respondents reported that they would not, or probably would not, take such measures. Only a small proportion of panelists reported that their firms would, or probably would, hire fewer workers or more frequently utilize short-term labor contracts. Even fewer indicated they might make more use of third-party contingent labor. Less than 10 percent thought their firm might or would reduce the size of their workforce.
| Given the vote on Brexit, due to heightened uncertainty, for the remainder |
|||
| Hiring fewer workers |
|||
| Composite |
Manufacturing |
Non- |
|
| Yes |
5% |
3% |
5% |
| Probably yes |
10% |
11% |
10% |
| Probably no |
25% |
19% |
26% |
| No |
60% |
67% |
59% |
| Using more short-term labor contracts |
|||
| Composite |
Manufacturing |
Non- |
|
| Yes |
1% |
1% |
1% |
| Probably yes |
14% |
12% |
14% |
| Probably no |
20% |
19% |
20% |
| No |
65% |
68% |
65% |
| Using more third-party contingent labor |
|||
| Composite |
Manufacturing |
Non- |
|
| Yes |
2% |
1% |
2% |
| Probably yes |
11% |
13% |
10% |
| Probably no |
20% |
15% |
21% |
| No |
67% |
71% |
67% |
| Reducing the labor force |
|||
| Composite |
Manufacturing |
Non- |
|
| Yes |
1% |
3% |
1% |
| Probably yes |
8% |
5% |
8% |
| Probably no |
24% |
22% |
24% |
| No |
67% |
70% |
67% |
Data collection for this study began on Saturday, June 25, and continues. The results presented here are based on data collected through the afternoon of Wednesday, June 29.
About This Report
The data presented herein is obtained from a survey of manufacturing and non-manufacturing supply executives based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.
Data and Method of Presentation
The Manufacturing and Non-Manufacturing ISM® Report On Business® are based on data compiled from procurement and supply executives nationwide. Membership of the Non-Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). The Non-Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).
The ISM® Report On Business® surveys are sent out to Manufacturing and Non-Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM® then compiles the report for release on the first and third business day of the following month.
ISM ROB Content
The Institute for Supply Management® ("ISM") Report On Business® (both Manufacturing and Non-Manufacturing) ("ISM ROB") contains information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, "Content") of ISM ("ISM ROB Content"). ISM ROB Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM ROB Content. ISM hereby grants you a limited, revocable, nonsublicensable license to access and display on your individual device the ISM ROB Content (excluding any software code) solely for your personal, non-commercial use. The ISM ROB Content may also contain Content of users and other ISM licensors. Except as provided herein or as explicitly allowed in writing by ISM, you may not copy, download, stream, capture, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM ROB Content.
Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, datastreams, timeseries variables, fonts, icons, link buttons, wallpaper, desktop themes, on-line postcards, montages, mash-ups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. This prohibition applies regardless of whether the derivative works or materials are sold, bartered, or given away. You may not either directly or through the use of any device, software, internet site, web-based service, or other means remove, alter, bypass, avoid, interfere with, or circumvent any copyright, trademark, or other proprietary notices marked on the Content or any digital rights management mechanism, device, or other content protection or access control measure associated with the Content including geo-filtering mechanisms. Without prior written authorization from ISM, you may not build a business utilizing the Content, whether or not for profit.
You may not create, recreate, distribute, incorporate in other work, or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM ROB Content can be made by contacting in writing at: ISM Research, Institute for Supply Management, 2055 East Centennial Circle, Tempe, Arizona 85284-1802, or by emailing [email protected], Subject: Content Request.
ISM shall not have any liability, duty, or obligation for or relating to the ISM ROB Content or other information contained herein, any errors, inaccuracies, omissions or delays in providing any ISM ROB Content, or for any actions taken in reliance thereon. In no event shall ISM be liable for any special, incidental, or consequential damages, arising out of the use of the ISM ROB. Report On Business®, PMI®, and NMI® are registered trademarks of Institute for Supply Management®. Institute for Supply Management® and ISM® are registered trademarks of Institute for Supply Management, Inc.
About Institute for Supply Management®
Institute for Supply Management® (ISM®) serves supply management professionals in more than 90 countries. Its 48,000 members around the world manage about $1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business®, its highly regarded certification programs and the newly launched ISM Mastery Model™. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
Media contacts
Kristina Cahill
480.752.6276 ext. 3015
[email protected]
Riley Conover
480.752.6276 ext. 3121
[email protected]
Logo - http://photos.prnewswire.com/prnh/20121101/LA02871LOGO
SOURCE Institute for Supply Management
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article