- 4th edition of the index for 2024 from BritishAmerican
Business and Bain & Company emphasises renewed strength of
transatlantic trade, business and economic relationships
- US companies' confidence in the UK business
environment stabilised in 2024, after two consecutive years of
steep falls, while UK confidence in the US remains high and
stable
- Companies highlight future policy stability, tax
competitiveness, and a strengthening of UK-US trade among top
priorities for the future
LONDON, July 24,
2024 /PRNewswire/ -- Leading British and American
businesses have given a new vote of confidence in the strength of
transatlantic ties on trade, business and economic relationships
despite an uncertain political context with national elections this
year in both the UK and US.
Today's fourth annual Transatlantic Confidence Index from
BritishAmerican Business and Bain & Company shows US companies'
confidence in the UK as a place to do business has stabilised in
2024, after two back-to-back years of sharp drops in sentiment,
driven by political and economic turbulence in Britain, with multiple changes of Prime
Minister, previous bouts of market turmoil, and the ongoing impact
of the UK's departure from the EU.
With UK companies' confidence in the US business environment
also little changed at high levels, combined British and American
business sentiment on the transatlantic economic corridor remains
firmly positive, BAB and Bain report. The headline BAB-Bain
Transatlantic Confidence Index for 2024 shows a score of 7.1 out of
10, up from 7.0 last year – boosted by the score for US investors'
confidence in the UK ticking up to 6.6, from 6.5 in 2023. The index
for UK businesses' confidence in the US was unchanged at 8.4 out of
10.
In a further signal of the continued, underlying strength of
both markets and of the US-UK economic relationship, BAB and Bain
note that investors from both sides of the Atlantic report stable
or increasing confidence, and plan to maintain or increase
investment levels in both countries. The findings suggest a current
calming of conditions after a series of major disruptions for both
US and UK business in recent years – including the Covid-19
pandemic, resurgent inflation and higher costs of doing business in
both nations – as well as pointing to cautious optimism over AI and
its potential boost to productivity.
Stable future policies for business seen as critical on both
sides of the Atlantic
However, in a cautionary note amid heightened nervousness ahead
of November's US presidential election, the BAB-Bain report
highlights a strong focus by companies on both sides of the
Atlantic on the need for stable policies – as well as stronger
economic collaboration between the two countries.
Survey respondents in the UK rated the importance of UK/US
policy stability, regardless of the outcome of elections, at 8.0
(on a 1 to 10 scale) while US respondents scored this at 7.4.
Anxieties over policy stability also emerged from the survey's
examination of the two countries' strengths and weaknesses:
respondents raised concerns over political stability and regulatory
certainty in the US, and over political stability, as well as
talent mobility, in the UK.
Tax competitiveness a high-priority concern for both British
and American business
Tax competitiveness also emerged from the survey as a
high-priority concern for both British and American businesses. The
UK tax environment emerged as a top three priority for more than
70% of US companies surveyed, up from 60% in 2023 – standing out as
the only notable adverse shift in sentiment on the UK among US
investors in the wake of recent increases in corporate tax and
concern over further potential rises. Similarly, in the US, the
upcoming review of the Tax Cuts and Jobs Act has provoked worries
for UK businesses trading in America, with more than 70% citing a
competitive tax environment as a top three priority, also up from
60% in 2023.
For both the UK and US markets, access to capital and to talent
were called out by respondents as key strengths, as they have been
in prior years' surveys. UK investors highlighted US strengths in
innovation and incentives for R&D investment as important to
its attractiveness, while American investors in the UK also pointed
to R&D incentives as an important strength for Britain's business environment.
Transatlantic support for a strengthened UK-US trading
relationship remains strong
British and American companies were again united on the need for
greater UK-US economic partnership and steps by both governments to
bolster the transatlantic trading relationship. 61% of all
respondents supported a full free-trade agreement (FTA) between the
US and UK, making this the second-highest priority for businesses
for the US-UK relationship. Most companies indicated a preference
for a full FTA over sectoral trade agreements – while also
expressing interest in measures short of a full FTA, such as
existing transatlantic dialogues on AI and other technologies.
In addition, US companies in the UK rated the importance of
greater economic collaboration with like-minded allies at 8.4, and
UK companies in the US at 8.6. Alongside, the survey showed that US
confidence in the UK-EU relationship, while still only at
moderate levels, rose for a third year in a row, with a score of
6.1 for 2024, up from 5.1 for last year, reflecting recent
improvements in UK-EU relations, the report suggests.
Duncan Edwards, CEO,
BritishAmerican Business, said: "This year's results underscore the
strong confidence in the transatlantic corridor, which is
encouraging news. Companies on both sides of the Atlantic are
advocating for increased economic collaboration and policy
stability. However, concerns remain over the tax environment and
the cost of doing business in both countries. In fact, ensuring tax
competitiveness is now the top issue for US investors in the UK.
The new Labour government has insisted that growth is one of its
biggest priorities and we urge them to create a favourable
environment for attracting greater investment from the US."
Jonathan Frick, partner
at Bain & Company in London,
said: "The UK-US corridor is a critical foundation for the
future prosperity of Britain and
America. The vital importance of these relationships is why Bain
partnered with BritishAmerican Business on this study for a fourth
year in a row."
"In an era where businesses are dealing with unprecedented
disruptions, from geopolitics to the breakneck pace of
technological change with AI, at Bain we're working every day to
help clients reinvent their businesses and their strategy to meet
this moment. Against that a backdrop of big challenges, it's
greatly encouraging that our findings show the continuing strength
of transatlantic business and economic ties, which are more crucial
now than ever. At the same time, there are important messages for
governments in this year's results, in terms of the importance for
business of stable policies and the need to continue to nurture and
build our trading relationship in what is an ever more
interdependent world."
Media contacts
For any questions or to arrange an interview, please
contact:
BritishAmerican Business:
Dominic Parker (London) – Tel: +44 7500 115 352 Email:
dparker@babinc.org
Bain & Company:
Gary
Duncan (London) — Email:
gary.duncan@bain.com
Notes to Editors
This is the fourth edition of the Transatlantic Confidence Index
issued by BritishAmerican Business and Bain & Company. The
index survey measured the confidence of US companies that are
active in the UK and of UK companies that operate in the US. When
appropriate, data from prior index surveys is referenced for
comparison. (UK investors' confidence in the US was not measured in
the inaugural report, so statistics on UK confidence are available
only from 2022 onwards.)
A total of 76 companies doing transatlantic business responded
to the 2024 survey, including 51 US companies and 25 UK companies.
Combined, they employ nearly 320,000 people and represent a range
of sectors, including financial services, technology, healthcare,
media, telecommunications, and manufacturing.
While many factors influence confidence, our survey focused on
overall confidence for investing and trading, short-term investment
prospects, and the health of the US-UK relationship overall.
About BritishAmerican Business
BritishAmerican Business is the leading transatlantic trade
association incorporating the British-American Chamber of Commerce
in the US and the American Chamber of Commerce in the UK.
We are committed to strengthening the economic corridor between
the United States and the
United Kingdom by supporting
policies and action that protect and enhance the environment for
transatlantic trade and investment.
We convene and serve a growing network of companies and business
leaders through networking opportunities, bespoke programming and
marketing platforms.
About Bain & Company
Bain & Company is a global consultancy that helps the
world's most ambitious change makers define the future.
Across 65 cities in 40 countries, we work alongside our clients
as one team with a shared ambition to achieve extraordinary
results, outperform the competition, and redefine industries. We
complement our tailored, integrated expertise with a vibrant
ecosystem of digital innovators to deliver better, faster, and more
enduring outcomes. Our 10-year commitment to invest more than
$1 billion in pro bono services
brings our talent, expertise, and insight to organizations tackling
today's urgent challenges in education, racial equity, social
justice, economic development, and the environment. We earned a
gold rating from EcoVadis, the leading platform for environmental,
social, and ethical performance ratings for global supply chains,
putting us in the top 2% of all companies. Since our founding in
1973, we have measured our success by the success of our clients,
and we proudly maintain the highest level of client advocacy in the
industry.
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