Brexit: Small businesses may escape worst of impact

Brexit may be a major concern for some businesses, but many small businesses feel they may escape the worst of it, a new survey by the Irish Small and Medium Enterprises (Isme) association has found. Conversely, many smaller businesses also feel they will not see much benefit from Brexit.

Some 77 per cent of people surveyed said Brexit would have no impact on staffing levels, with only 17 per cent predicting a decline. Almost half said there would be no change.

Some 11 per cent said their turnover would increase as a result of Britain’s plans to exit the EU, while the remainder were split almost evenly between no change and a fall in turnover.

But Isme warned that the survey may not reflect the impact of Brexit on the broader business sectors as its membership has a large number of services businesses. About half of businesses surveyed said none of their exports or sales were to the UK or sterling denominated, muting the impact the exit would have.

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The survey was conducted this month with responses from 1,416 Isme members, 68 per cent of which were in the services sector.

About 34 per cent of companies said their profitability would not change, with only 10 per cent predicting an increase. Almost half expected a fall of between 1 per cent and 20 per cent.

Direct exposure

Most businesses said they would not be relocating their business due to Brexit, with only 11 per cent considering moving less than half of their operation to the UK.

“We believe that the services, financial and insurance sectors on aggregate will have a lower level of direct exposure to Brexit-related impacts than will the industrial, construction and distribution sectors,” said Isme chief executive Neil McDonnell.

“This does not negate the Brexit-related uncertainties and challenges SMEs face across the country, particularly those in Border counties. Services businesses in Border counties may be more badly affected by Brexit than other businesses.

"These results do not give the complete picture of Brexit on the SME sector. The real scale of impacts, direct and indirect, will only truly be known when we see the shape of the agreement between the European Union and the United Kingdom. "