Most Irish firms unprepared for Brexit, survey finds

The outcome of Britain’s referendum on EU membership caught most Irish businesses by surprise, according to a new survey.

InterTradeIreland’s latest business monitor indicates that 97 per cent of firms, and 92 per cent of export firms, had no plans to deal with Brexit and the ensuing volatility.

The post-referendum uncertainty is further reflected by the relatively high number of businesses, approximately one in five, now reporting plans to decrease investment.

InterTradeIreland’s survey also indicated more than a quarter of Irish businesses (27 per cent) are concerned about exchange rates, an increase of 14 per cent on the first quarter, with sterling 10 per cent down against the euro since the poll.

"It is evident in the responses to our latest business monitor that the outcome of the EU referendum has caught many businesses on the hop and introduced a large degree of uncertainty into the marketplace," Aidan Gough, policy director at InterTradeIreland, said.

“Clearly businesses will need support to manage the ramifications of Brexit, particularly in the provision of timely and relevant information to assist them to adjust to any new trading relationships that emerge from Brexit negotiations.”

“In the short term, whilst companies will still trade under the same rules and regulations, we would encourage them to hedge any exposure their business may have to volatile movements in the sterling-euro exchange rate,” he said.

InterTradeIreland's survey also picked up a variation between companies in the Republic and their Northern Ireland counterparts in terms of the perceived Brexit impact on cross-Border trade.

While almost three in five of businesses in the Republic (57 per cent) felt that cross-Border sales would decrease, only one in four Northern Irish firms felt they would be negatively impacted (25 per cent).

Variations

There were also variations across sectors. The hospitality industry is expecting a sharp decline in cross-Border sales with four out of five (84 per cent) companies expecting a downturn.

In comparison, about half of those in the manufacturing (49 per cent), construction (52 per cent) and servicing sectors (52 per cent) foresee a sharp decline in their cross-Border business.

Of those questioned, retailers are the most positive, with 15 per cent anticipating an impact, which the survey suggests this may be due to exchange rate volatility.

“In terms of wider business performance, the picture remains generally positive. In quarter two, 93 per cent of businesses in Ireland report that they were stable or growing,” Mr Gough said.

“We may see uncertainty continuing in forthcoming quarters while companies adjust to the changing realities,” he added.