Almost all Irish senior executives believe that a hard Brexit is inevitable, with less than a quarter considering that a deal is possible in two years, according to a new survey. However, the executives were optimistic that Brexit could eventually be good for Ireland, with 86 per cent suggesting that the State will become a more attractive place for business as a result of Brexit.
The executive expectations report from Merc Partners surveyed 275 senior Irish executives and found that less than half believe that the prospects for the Irish economy are better now compared to 12 months ago. Some 30 per cent of respondents believe prospects for the year ahead are negative, with Brexit and the election of Donald Trump as US president causing the most concern.
The findings come as Enterprise Ireland warns small- and medium-sized companies that they should carry out their own research on how Brexit will affect their business.
Enterprise Ireland chief executive Julie Sinnamon has also urged businesses not to wait until Brexit officially happens – but to prepare for it now.
“We live in uncertain times, and Brexit will prove a challenge for many regional enterprises,” Ms Sinnamon said in advance of an event in Sligo on Friday.
“Despite the uncertainty, the UK continues to be Ireland’s main trading partner, and it is for that reason that innovation is at the heart of Enterprise Ireland’s strategy, helping businesses to secure and maintain competitive advantage.”
The Merc survey found that executives remain positive on employment prospects. Close to half of respondent organisations now employ more people compared to the same time last year, while 54 per cent anticipate they will take on more staff by the end of 2017.
The report also points to an improvement in the level of female representation in senior management roles. Some 52 per cent of organisations surveyed either met or exceeded the target of 30 per cent female representation at the most senior levels.
A majority of respondents also believe that Ireland outperforms international competitors when it comes to quality of life, overall education services and entrepreneurial environment.
One of the consequences of the speed of the recovery is that there are immediate and pressing demands for resources across the economy, according to the report.
75 per cent of executives identify the housing shortage as a concern – an increase from 71 per cent last year – while the availability of skilled labour causes concern for 70 per cent of respondents. The rate of personal income tax also worries executives, with 69 per cent citing it as a cause for concern.
The survey respondents had further concerns surrounding the specific impacts of Brexit. Nine in 10 see potential trade barriers on Irish exports as the biggest Brexit-associated risk. Currency fluctuations didn’t concern executives as much as other issues, with 14 per cent of respondents identifying this as a top issue.
The cap on public sector pay, which was introduced early in the recession, is seen to have outlived its usefulness – just under three in five respondents see it as a negative.
Cost of housing
On Ireland’s relative performance to other locations for availability and cost of housing, 93 per cent believed that the country was underperforming. The health system, the cost of living and the tax environment were also cited as areas in which Ireland has underperformed.
On potential decisions for the Irish government, 80 per cent of executives surveyed think that the abolition of water charges is a bad call, 60 per cent don’t support an invitation to president Trump for an official visit to Ireland, and 65 per cent think third level fees could be introduced to increase university funding.
"While the overall outlook is optimistic, our analysis highlights some perceived threats which are influencing decision-making. It's clear that the decisive leadership shown by senior Irish executives is in return expected from their Government," said Ruth Curran, managing partner at Merc Partners.
The survey was conducted by Amárach research on respondents from a variety of industry backgrounds. Twenty-four per cent of the sample were aged between 36 and 45, while 49 per cent were aged between 46 and 55.