Irish businesses optimism levels down 11% due to Brexit fears

Irish businesses optimism levels down 11% due to Brexit fears

A new index has shown business confidence in Ireland has taken a significant hit.

The BDO's Optimism Index has shown confidence levels are down 11% from the same quarter last year.

The figure has slumped to levels not seen since 2014.

The index is a quarterly study that monitors business sentiment across Ireland.

For this quarter, it found:

  • Business optimism levels down 11% from the same quarter last year.
  • Around two-thirds of Irish businesses (63%) believe that Brexit will have a negative impact on their business.
  • A quarter of Irish businesses expect to report lower levels of business activity compared to the same quarter last year.
  • The overall trend towards higher prices has continued.

Following the UK's vote in 2016, just 34% of businesses saw Brexit as having a negative impact, compared to 63% now.

"The results of the latest BDO Optimism Index highlight the increasing levels of concern Irish-based companies have about the impact Brexit will have on their business, most likely sparked by the UK leadership change towards a more hard-line Brexit government," said Carol Lynch, a Partner in BDO Ireland’s Customs and International Trade Services department.

"Although we are still unsure about the full impact Brexit will have, one certainty is that once Britain leaves the EU there will be a requirement for exporters and importers to make declarations and pay customs duties.

"This will involve costs for customs compliance and additional costs associated with potential delays at borders."

Ms Lynch added that businesses "need to take practical steps to prepare for Brexit as the deadline draws closer.

"We are advising clients to analyse their supply chains and business strategy, so they can isolate their exposure.

"Examining the supply chain to reduce the potential negative impact of Brexit on your business and alleviating costs associated with this are the first steps every business should make when examining the potential Brexit impact."

It was earlier reported the crash-out Brexit fears caught up with Irish manufacturers in August as output contracted at a pace not seen since spring 2013.

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