Ready for Brexit? Business Snapshot Based on Open Web Content.
With the latest Brexit deadline fast approaching, glass.ai have taken a look at what companies are talking about when they discuss Brexit on their websites, in company reports, and in the news.
glass.ai reads the websites of over 1.5 million UK businesses and around 6,000 news sources. Using proprietary AI to understand language at scale, we have built profiles of businesses and their activities — enabling insights into markets and industry sectors. As part of this ongoing effort to digitally map the world’s economy, we decided to turn the AI’s attention to Brexit.
Brexit on the Business Web
First, we looked for the main words that businesses use when they speak about Brexit on their own websites.
Examining these key terms — impact, uncertainty, growth and investment — we looked at what areas of the business or market were being discussed when these were mentioned.
This shows concerns about business and consumer confidence, financial markets and impacts on exchange and interest rates, as well as uncertainty around businesses supply chains and the housing market.
Next, we have taken a look at whether there are differences between different sizes of a business and how they are discussing their plans for Brexit. Comparing FTSE 100 and FTSE 250 businesses with non-FTSE businesses, we discovered that while 85% of FTSE businesses did mention Brexit on their websites, only 4% of non-FTSE businesses had any discussion of Brexit.
Digging deeper into the differences between FTSE and non-FTSE businesses, we carried out a sentiment analysis on the content that did mention Brexit to see if it was being talked about positively or negatively. It is important to highlight that in this case sentiment is not necessarily an opinion on Brexit itself but often a statement about business preparations for Brexit.
We can see that businesses outside of the FTSE 350 have a much flatter distribution of sentiment than those within the FTSE 350. In the FTSE 350, businesses are mostly making neutral statements about Brexit with a small positive bias overall.
Beyond the size of businesses, what can we learn about how different industries are talking about Brexit. Based on the activities that businesses talk about on their websites, glass.ai classifies businesses into different industry sectors. We looked at sentiment in statements about Brexit across these industries.
This shows a range of sentiment across different industries. For example, Healthcare companies are making positive statements about their preparedness for Brexit. On the other hand, Technology companies mention uncertainty about their workforce and access to clients.
Brexit in the Business News
So far this analysis has been based on the content found on company websites, but what are the companies saying in the news?
It appears that businesses are sending a more negative view of their position, or at least is being interpreted as having a negative impact on the economy. If we break it down by industry then we can see even more clearly the difference between what businesses are saying on their own web sites vs. how they are appearing in the news — with a 26% overall negative swing.
Where Brexit is being discussed in the news, here are the areas that the businesses are talking about.
Some of these areas are clearly related, where jobs (i.e. resources) are moving to different countries vs. job losses. Looking more deeply into moving resources (e.g. jobs, money, stock), we also looked at the locations that were being mentioned as potential destinations for these resources.
How is content shifting?
The previous sections have outlined the analysis of content at the end of August 2019. We have also taken a snapshot of the content at the end of September 2019 to see if there are any differences between how Brexit is being talked about on business websites. For the FTSE 350 companies, this highlighted a small negative shift from slightly positive statements around Brexit overall on the business websites to a negative viewpoint.
The negative shift highlighted a 25% increase in mentions around no-deal Brexit. Many of the same areas of concerns exist as before, but recently there has been an increase in discussion around supplies of medicine and regulatory compliance, and the shipping and maritime industry.
We can also look for the sentiment of news and on social media to get more insight into what has changed around the Brexit landscape. The charts above show the sentiment of a sample of tweets about Brexit from twitter and both general news and news mentioning the FTSE 350 businesses during September, the period leading up to the new snapshot. The sentiment is calculated by counting the number of positive or negative statements in tweets or articles and calculating the % density. You’ll notice that most discussion around Brexit is negative. The left-hand chart above is showing all tweets or news articles in the sample that mentioned Brexit. Each of the sources show a similar pattern, starting low, rising a bit and then falling back down. The right-hand chart is filtered on those that also mentioned no-deal and shows a slightly different pattern with each of the sources rising over the period with the exception of business news involving the FTSE 350 companies. This difference is emphasised in the following chart where the no-deal sentiment is normalised based on the overall sentiment of the source.
This shift in news content over the period of September seems to reinforce the downward shift that was noted when comparing the FTSE companies websites from the end of August to the end of September. It is also interesting that general news and conversation around no-deal Brexit has grown positively in the period, although overall the sentiment remains negative.
Discussion
We have presented a comprehensive business survey based on reading and interpreting open web content from over 1.5 million business web sites and mentions of those businesses in the news. It appears that whilst businesses are concerned about the impact of Brexit and uncertainty around what it means for them, FTSE businesses do seem to have been putting preparations in place for Brexit. However, beyond listed companies, there is very little discussion from businesses on considerations for the impact of Brexit or any evidence of preparations taking place. And, although preparations are in place at the larger businesses, there seems to be concern expressed — in the news at least — of the impact these changes may have on the UK economy. In particular, recent updates show an increased level of concern around the business implications of a no-deal Brexit.
UPDATE: Since performing this analysis, and discovering a negative sentiment shift during September around no-deal Brexit, a number of industry sectors have come together and written to the government expressing this same view and raising concerns around regulatory alignment also highlighted in our study “Government faces industry backlash on Brexit plans”.