Irish companies largely unprepared for Brexit - Enterprise Ireland

Agency has opened new fund to support affected firms, offering up to €150,000

Minister for Business Heather Humphreys with Enterprise Ireland chief executive Julie Sinnamon and chairman Terence O’Rourke at the Ding offices in Dublin yesterday.  Photograph: Dara Mac Dónaill

Minister for Business Heather Humphreys with Enterprise Ireland chief executive Julie Sinnamon and chairman Terence O’Rourke at the Ding offices in Dublin yesterday. Photograph: Dara Mac Dónaill

 

Irish companies are still largely unprepared for Brexit and must put plans in place as quickly as possible, the head of Enterprise Ireland, Julie Sinnamon, has warned.

Speaking as the State body announced a new fund for companies most affected by Britain’s exit from the European Union, Ms Sinnamon said firms in Ireland were already beginning to feel the impact of Brexit. She predicted further uncertainty and volatility as negotiations continue over the coming months.

Ms Sinnamon said that while Brexit remains the most pressing issue facing Irish companies many have delayed putting plans in place to protect themselves.

“I think companies were initially very slow to believe that Brexit was actually going to happen. Many companies carried on as though it were business as usual at the start,” she said.

While she said the hike in the sterling/euro rate had led companies to take the issue more seriously, many firms were still too busy talking about Brexit than looking at ways to deal with it.

“Companies were in denial as to whether Brexit would happen. It was probably wishful thinking that it wouldn’t go ahead,” said Ms Sinnamon.

EI’s new Market Discovery fund, announced on Wednesday, provides up to €150,000 to support companies to diversify into new markets and expand their presence in existing ones outside of the UK.

Ms Sinnamon said every Irish firm with exposure to the UK market needed to have a strategy for dealing with Britain’s exit from the EU, warning that companies will be under sustained pressure ahead of a final agreement from the two sides.

Complacent

“Companies can’t be complacent...there will be mood swings over the next couple of months as the negotiations continue and there will be uncertainty and volatility which will impact on exchange rates and companies need to plan for that,” said Ms Sinnamon.

Under its latest strategy, unveiled last year, Enterprise Ireland is looking to achieve growth of €26 billion in exports by client companies by 2020 with 67 per cent of that coming from outside of the UK market.

Ms Sinnamon said that while Enterprise Ireland was working with sectors most affected by Brexit, it was up to companies themselves to do more in terms of preparation.

“Despite all of the road shows we’ve run and all of the other work we have done there still is not enough focus by Irish companies in terms of preparing for Brexit,” she said.

“The constraints from an EI perspective are not to do with funding...the big issue has been getting sufficient numbers of companies to move into action as opposed to just talking about it. It isn’t that companies are doing nothing but not enough of them have looked at all the risks associated with Brexit and put in place a plan to deal with it,” she said.

Ms Sinnamon’s comments come as Enterprise Ireland said firms it supports created more than 19,000 new jobs last year.

A total of 209,338 people are now employed in companies backed by EI, the highest total number achieved in the history of the agency and a higher number than those working in multinational firms.

Consecutive growth

2017 marked eight years of consecutive growth in employment at EI-backed companies. Taking into account job losses, there was a net increase of 10,309 new roles created last year, making it the best performance ever by client companies.

The figures show every region showed growth in terms of employment as did every industry sector. Some of the industries worst affected by the recession showed positive growth with the number of new jobs created, for example, in the construction sector rising 8 per cent.

The construction, life sciences and engineering sectors delivered the largest jobs increases overall, EI said.

Two-thirds of the new jobs created last year were outside of Dublin. The west, mid-west and northwest saw the largest level of increases.