Over half of small and medium enterprises (SMEs) surveyed by AIB in its sentiment survey are reviewing, postponing or cancelling investment plans.
The bank's Brexit sentiment index for the first quarter of 2019 shows that two-thirds of SMEs have begun formally planning for the implications of Brexit, a rise of 16 per cent on the last survey, while 56 per cent of SMEs in Northern Ireland have yet to start planning.
Preparedness in the Republic rose as sentiment fell on the bank’s index, to a low of -52, from -41 in the previous survey. That increasing negativity is driven by a feeling among SMEs that Brexit is starting to have an impact on business with 76 per cent concerned about its affect in the future.
"The overall sharp decline in Irish business sentiment in the Republic to an all-time low of -52 (from a previous low of -41) reflects the heightened uncertainty that businesses were experiencing throughout March 2019 when this wave of Brexit sentiment research was undertaken," said Catherine Moroney, the bank's head of business banking.
“Sentiment has dropped to its lowest levels across most sectors, with key economic sectors of retail, tourism, manufacturing and transport registering a significant decrease in sentiment.
"Businesses have told us their three main concerns in the event of a hard Brexit are that trade with the UK would be less profitable, Irish customers spending less and the knock-on effect of a wider economic downturn in Europe, " she added.
AIB’s survey showed that the food and drink sector was the most negative (at -56) followed by tourism (-55) and retail (-53). The percentage of businesses reporting a negative impact on sales in the Republic has almost doubled from September 2017 to 23 per cent.
AIB's Brexit sentiment index is a quarterly survey of more than 700 SMEs across the Republic and Northern Ireland, conducted by Ipsos MRBI.