Brexit causing confidence among Irish businesses to hit all-time low

A new survey has found that almost half of Irish businesses are experiencing the negative impacts of Brexit.

The AIB Brexit Sentiment Index for the first quarter of 2019 is the lowest since the study began.

It shows that tourism, retail and food and drink are the sectors worst hit.

Two-thirds of SMEs have begun some form of planning for Brexit, while over half are either reviewing, postponing or cancelling previous plans to invest.

56% of SMEs in Northern Ireland have yet to start their Brexit planning or inquiries.

Concerns over Brexit continue to impact investment plans, with 53% of Irish SMEs and 66% of NI SMEs that planned to invest in their business now reviewing, postponing or cancelling their plans.

Catherine Moroney, Head of Business Banking AIB said: “The overall sharp decline in Irish business sentiment in ROI to an all-time low of -52 (from a previous low of -41) reflects the heightened uncertainty that businesses were experiencing throughout the month of March 2019 when this wave of Brexit Sentiment Research was undertaken.

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.

" It is encouraging to see that businesses have substantially increased their level of Brexit preparedness with 64% of Irish businesses now stating that they have started, or completed their formal Brexit Planning (up from 48%).

"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 said.

AIB Chief Economist Oliver Mangan said: “The deterioration in the Brexit sentiment index in the Republic of Ireland was evident across a range of sectors in the survey – retail, tourism, manufacturing and food and drinks.

"The survey also reveals deepening concerns amongst an increasing number of SMEs in the ROI about the future impact of Brexit, with 76% saying that it will have a negative impact on their business in the future and 81% expecting the wider economy effect to be negative.”

AIB’s Brexit Sentiment Index conducted by Ipsos MRBI is a quarterly survey of more than 700 SMEs in Ireland and Northern Ireland that assesses the attitudes of SME business leaders on Brexit and the impact on their businesses.

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