What impact, so far, has Brexit had upon the Web Design industry and the Birmingham market?

Has Brexit influenced the Web Design market yet? Or is it still yet to be felt?

Web Design, Birmingham and Brexit

At first the Brexit vote brought a lot of uncertainty, almost immediately after the vote we noticed a lot of companies of all sizes putting things on hold. Some were just excuses, but for the bigger companies we noticed a lot of genuine uncertainty that their businesses could be massively affected.

Sponsorship, Education and companies with activities oversees are having to think twice about budgets and the number of our associates who are hearing the phrase “Sorry, we need to review budgets” is staggering, although in the last few months this appears to of resided a little bit as the picture becomes a little clearer than it was in the immediate aftermath.

The first signs of change could be seen upon the recruitment market. Agencies from outside the EU have often citied it can be difficult to recruit could people from inside the EU. The rise of remote working could therefore increase, will we see a rise in remote working due to Brexit?

Web Designers and those in the tech industry tend to have cool laid back vibe about them by nature, this often leads to Web Designers working and travelling across borders quite regularly. Brexit could put added costs and complexity to this which could result in a shortage of web developers travelling in to and out of the UK due to high costs and complexity.

What is the good news about Brexit & Web Design?

The good news is that in our local area of Birmingham, we have not seen any big impacts, in fact local business is booming better than national business for ALT. People will most often than not have a requirement for a Web Designer to manage their websites, but we have noticed a little squeeze in London.

Before Brexit the opportunities in London were many, but with so many having exposure to Europe, in particular the financial sector.

Birmingham seems pretty strong, housing prices are steady, commercial property – such as the retail park just sold in Birmingham for a reported £5million is showing a confidence post-brexit.

Greater Birmingham & Solihul have also recently announced a boost to the area with investment in infrastructure, transport, 250,000 new jobs with an expected output of £29 billion pounds.

Online housing listing website Zoopla has seen full year profits jump by 38%, underlining the current strength of the housing market.

Zoopla has released information pointing to over 600 million visits to their website and apps – With 68% of this being mobile.

In a further positive sign, Zoopla also recently announced the purchase of technicweb purchasing their online website design and hosting business. A string sign that not only underlines the strength of property in the UK but also Online Business.

One great benefit for UK Web Design Companies is for those who have overseas clients paying them in USD. The weak pound has opened the opportunity to do business with those paying in USD as it makes it a lot cheaper for them.

For UK web designers who have pre-existing agreements with companies paying in USD for fixed fees, such as ALT, have seen the exchange rate bring a boost of around 10-12% when converting USD to GBP.

However this does come with the reverse downside!

What is the bad news about Brexit & Web Design?

For Web Designers, currently most of the current impact is around the falling pound and strengthening dollar.

For web design companies that outsource margins will be shrunk as it costs more pounds to hire an overseas developer, especially when converting from GBP to USD.

It’s not just developers that have gotten more expensive, software costs have also risen as the pound falls and dollar strengthens.

We estimate that software costs have increased around 15-17% since the Brexit vote.

Web Designers, some of who work from home and aren’t affected by high street rents and business rates are seeing a knock-on effect as their customers are affected and go out of business leaving some web design companies with clients cancelling monthly retainers or going out of business altogether and leaving debts.

How will Brexit affect your Website?

Initial concern is around a loss to talent and intellectual property. Leaving Europe could make it far more difficult for UK companies to protect their intellectual property and could see a change in design/product registration laws.

Working with your web design team and your web design team collaborating with others could become far more difficult. If you work with an overseas based web design agency, then you may find it more difficult and more expensive to visit them at their overseas office. Web Design agencies could also suffer the same issues as many work with and collaborate with teams across Europe and the globe. Visiting & travel could be made far more difficult & expensive.

Intellectual property rights could become more complex as the EU has helped protect designers and their original works over the years. However, a different set of rules could apply and enforcing these copyright laws could become a little more difficult.

Could leaving the EU see the cookie law vanish from the UK and UK websites? Many websites dealt with this by adding a pop up informing visitors a cookie was being installed, could this now be revisited and a single page explaining the cookie policy just be required or could we see the (highly unlikely) removal of it from UK websites altogether?

Currently if you store data on your website from a visitor who is EU based then their data must be stored on an EU based webhost for data protection. Will this push costs up further for hosting located in the EU rather than the UK?

 

There are lots of pro’s and con’s to Brexit and the effect it will or is having on your Website and our local area of Birmingham. Whilst the full impact is yet to be felt the signs currently are strong & positive overall.

14 comments on “How will Brexit affect Birmingham Business?

  • James Wilkinson says:

    Interesting challenges ahead for the industry… We’ve experienced a big rise in cost of software which has hit our bottom line, but yet to feel any other major effects.
    We’ll see what 2017 brings though! Great article…

    Reply
  • Thank you for this thoroughly engaging and informative assessment of the current situation. Things go round in circles and cycles, and it gets back to balance eventually.

    Reply
  • In perspective from one small outsourcing firm, stronger $ bring us more revenue, and in terms of Brexit i don’t sense any effect. Maybe globalisation reach is more stronger then one country political decisions.

    Reply
  • Just a hunch,but I think Brexit will be good for smaller, agile businesses. Not immediately, of course. But in the long run I think it will.

    How so?

    We are bombarded with news of multinational companies evading/avoiding tax, heads of trustworthy organisations (IMF, anyone) being found guilty of fraud, mis-management of pension funds, blue-chip abuse of zero-hours contracts. You get the picture.

    And for Mr and Mrs Joe Public?

    They’re getting fed up with corporate abuse of their trust. I built a VAA (voter advice application) website last year, and it was clear that people are fed up with the way that multinationals are ‘getting away with murder’. More so now than ever.

    That’s one of the reasons Brexit happened (amongst others). EU ‘waste’, corporate fraud, tax evasion, the Bilderberg meetings, tonnes of secrecy and not enough transparency. Lots of people wanted out, and they made their voice heard.

    What’s this got to do with small businesses?

    Because of this mistrust, consumers are voting with their feet. They’re more willing to support small businesses. They’re reluctant to spend their money to line CEO’s pockets (and their shareholders). The trend towards supporting small businesses is growing.

    Don’t get me wrong. Capitalism is – in my eyes – a good thing. But the balance of power is shifting away from big business, and I think Brexit will ultimately help to drive consumers back towards small businesses that are the lifeblood of small communities.

    Reply
  • Interesting. I agree with the point around uncertainty. Companies are either putting their investment on hold or diverting it somewhere else until the have a vivid picture of what to expect post brexit.

    The ecomonic impac will mostly depend on the post brexit agreement. Any tarrifs will hit UK exporters’ competitiveness.

    Reply
  • It is really interesting what you say here Craig. We nearly lost our biggest client immediately afterwards as they were hit hard immediately as they had not transferred funds into USD before the Brexit vote but reduced their spend with us instead. Plus our cost of sale has increased by about 10%.

    However, we have notice a sharp upturn in interest in our services and businesses since and I am personally very optimistic for the outlook for our business in 2017 and beyond, providing Trump or Putin doesn’t start a World War. I believe that we will become a much more outward looking GB again.

    Reply
  • Great discussion guys.

    Rupert – We also noticed a small immediate panic’ if you will, we found it was more with prospects than existing clients, so pheraps an ‘excuse’ for them in our case?! But sorry too hear about your loss.

    Uncertainty seems to be the keyword phrase and with the court case going on and no clear picture as to what will happen yet, we could still see more businesses being a little reserved early into the new year.

    I still personally think there will be a slight recession next year, with housing and maybe business areas a little, still super super bullish on the prospects for 2017 with or without a small recession.

    Thank you to everyone who just us from other media outlets and the traffic that came from Washington Post.

    Reply
  • Very interesting read, and thank you for highlighting not just the negatives of Brexit, but also the positives and the overall impact it will have on web design.

    I’ll share this round with the team and super useful for our business, thank you!

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>