Brexit continues to be a burden: the economic situation has only improved for six percent of companies

Survey by KPMG in Germany and the British Chamber of Commerce in Germany (BCCG)

Survey by KPMG in Germany and the British Chamber of Commerce in Germany (BCCG)

  • 34 % of companies affected by stricter regulations in 2024
  • 52 % of companies complain that their situation has deteriorated since Brexit
  • No turnaround in sales and earnings in 2023
  • Opportunities for strategic future fields of cooperation for Germany: digitalization (47 %); ESG (33 %); energy production/energy security (33 %) and defence (26 %)

Berlin, 18 April 2024

In year four after Brexit, the burden on companies active in the German-British corridor remains high. Increased administrative expenses, logistics costs and customs duties are proving to be permanently painful. In addition, new regulations in the UK-EU corridor, which will be introduced in 2024 and beyond, will lead to an increasing decoupling of the British Isles from the EU.

These are the findings of the annual "German British Business Outlook". The survey was compiled for the sixth time by KPMG in Germany and the British Chamber of Commerce in Germany (BCCG). It will be officially presented at this year's Ludwig Erhard Summit in Tegernsee, Bavaria, and focuses on the business expectations of German and British companies.

Declines in sales and earnings continued in 2023, but future expectations are somewhat more positive

Business development in the German-British corridor remains challenging. Although 38 % of companies were able to increase their sales last year, almost as many (36 %) recorded a decline in sales.

The situation is even clearer when it comes to profits after tax: Only 29 % of companies achieved growth, while 39 % had to accept declining profits. There are no signs of any significant improvement for the current financial year: Almost one in three companies (31 %) expect less turnover. In the long term, more than one in four companies (26 %) expect turnover to continue to fall over the next five years.

Brexit burdens continue to mount

More than one in two companies in the German-British economic area (52 %) report a deterioration in their business situation since Brexit. The proportion of those reporting a significant deterioration has almost doubled from 9 % in the previous year to now 16 %. In comparison with previous year, the proportion of companies who state that their business has improved since Brexit has halved from 13 % to 6 %.

Increased administrative costs remain the main burden, cited by one in four companies (25 %), followed by increased logistics costs (13 %) and higher customs duties (12 %).

"We urgently need to bring politics and economies of both countries closer together again and build bridges. I warn against further decoupling, especially in view of the geopolitical challenges," says Michael Schmidt, President of the BCCG.

New wave of legislation in the UK and EU leads to additional burdens on German-British trade

Various new regulations will come into force in the UK-EU corridor in 2024. They were initially postponed when Brexit came into force in February 2020. The "Border Target Operating Model" in particular will have a significant impact, affecting more than a third of companies (34 %). This introduces additional controls and documentation requirements for certain product groups such as animals, plants and food.

Similarly, 28 % of those surveyed by KPMG and BCCG expect the successive replacement of EU regulations with new UK regulations following the expiry of the "Retained EU Laws" to have a significant impact.

Around 30 % expect bureaucratic obstacles and significantly rising costs as a result of the Carbon Border Adjustment Mechanism (CABM), which the EU is introducing for imports into its community of states and which will differ significantly from the UK CBAM.

Almost one in four companies (24 %) also see their German-British business activities affected by the new EU Supply Chain Act.

Opportunities for cooperation: Focus on strategic areas of Germany's future

The megatrends of digitalization and ESG remain the most important business areas for cooperation (47 % and 33 % respectively) for British and German companies. The importance of digitalization has increased significantly by 8 percentage points compared to the previous year. The topic of energy generation and energy security is also increasingly seen as a field of cooperation. One in three companies (33 %) see opportunities for cooperation here (+11 percentage points compared to 2023).

Increased opportunities for cooperation in the German-British corridor are also seen in the area of defense. This increases by 7 percentage points to 26 %.

Investment plans: first signs of a slight improvement

The general reluctance to invest in the UK has been gradually declining since 2021. Back then, 69 % of companies had no investment plans at all. In the current survey, only just under one in two companies (48 %) stated the same.

"It is interesting to note that 7 % of respondents are planning major investment projects with a volume of more than EUR 250 million over the next three years. A glimmer of hope that not a single company had on its books in the last survey," says Michael Schmidt. Smaller investments with a volume of up to EUR 5 million are planned by 38% of companies (+5 percentage points compared to the previous year).

About the German British Business Outlook 2024:

For this survey, KPMG in Germany and the British Chamber of Commerce in Germany (BCCG) surveyed both, German subsidiaries with headquarters in the UK and British subsidiaries with headquarters in Germany. A total of 173 companies (136 in the previous year) took part in the survey. The survey was conducted between January 22 and February 28, 2024 (previous survey: April 11 - April 28, 2023).

82% of the companies surveyed are headquartered in Germany (previous year: 86%), 18% in the UK (previous year: 14%). Of the companies headquartered in Germany, 42% have been active in the UK for more than two decades (previous year: 44%); 19% (previous year: 18%) have even been active for more than fifty years.

Press contacts

KPMG AG Wirtschaftsprüfungsgesellschaft

Katrin Häbel
Head of Corporate Communications

+49 69 9587 4228


British Chamber of Commerce in Germany (BCCG)

Corinna Schlag
Presse BCCG

+49 173 603 83 71