Irish businesses are seeking to reduce their dependency on the UK market amid concerns about the imposition of further Brexit-related checks or red-tape measures, according to Grant Thornton Ireland's latest international business report.
The survey of 62 mid-size Irish businesses found that over a quarter (27 per cent) were endeavouring to reduce their exports to the UK while 21 per cent were trying to reduce their reliance on UK suppliers.
Since the UK’s departure from the EU, imports from Britain into the Republic have slumped while there has been a pick-up in North-South trade, suggesting some firms here are using the North as a workaround.
Trade bodies are, however, warning that further post-Brexit border controls due to come into force in June could cause long delays at UK ports, further hampering trade.
With many Irish businesses reducing their exports to the UK, Ireland is looking towards the US, where it has identified the greatest market opportunity for the coming 12 months, highlighting a shift in priority from last year, where Irish businesses identified the UK as having the greatest market opportunity, Grant Thornton's report said.
Despite the additional challenges posed by Brexit, Irish businesses still identify the UK as the main territory for revenue growth over the coming year, which indicated that despite the red tape and additional paperwork associated with Brexit, the UK will still remain a key market for Irish businesses, the report.
Amid the current surge in inflation, almost two-thirds (63 per cent) of Irish businesses surveyed said they expected to increase selling prices over the coming 12 months.
“While the results of the International Business Report reflect a consistent trend of concern for Irish businesses five years after the British referendum to leave the EU, many Irish businesses have employed additional resources to deal with the realities of Brexit,” Jarlath O’Keefe, head of indirect taxes at Grant Thornton Ireland, said.
"Irish businesses are looking to explore alternative markets within the EU, United States and China as they look to decrease dependency on the UK market," he said.
While it is a challenging time for Irish businesses amid rising inflation, labour market shortages and Brexit bureaucracy, it is promising to see that 85 per cent of businesses are optimistic for the coming 12 months and are channelling resources into exploring alternative non-domestic markets for business growth,” he said.