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The British exit from the European Union, commonly referred to as Brexit, has global ramifications, but its impact on U.S. businesses is still to be seen.
The U.K. is feeling the strongest and most immediate economic impacts of the Brexit vote in June, but the decision will affect the world economy, and business owners in the U.S. are watching carefully to see what happens, Fast Company reports.
American companies that do business with countries in the European Union will see the biggest changes, but the broader effects of Brexit could include changes to the U.S. housing market—which would directly influence the home improvement industry—and create an economy that isn’t as healthy for new businesses.
In the Fast Company article, economist Jonathon Todd emphasizes the potential domino effect of Brexit.
“Businesses don’t respond well to uncertainty, and even though this event happened in Europe, it makes U.S. businesses wary,” Todd says. “This generally isn’t the best environment for starting a company or growing a burgeoning startup.”
A potential upside to Brexit may directly impact home improvement retailers in the U.S. because “the global turmoil has driven investors to the safety of U.S. Treasury bonds, pushing down the yield on 10-year notes” and decreasing interest rates on loans, including mortgages, according to USA Today.
Lower mortgage rates mean buyers could potentially afford to purchase more expensive houses than they might have earlier this year, or spend money on home improvement projects that would have otherwise gone toward higher mortgage payments.
