Sharp decline in Irish business optimism as Brexit approaches

There has been a sharp decline in the optimism of Irish companies in the lead up to Brexit.

A new AIB report shows sentiment around profits, employment and investment are down dramatically over the past five months, with confidence now at its weakest point in eight years.

Brexit's impact on suppliers' is a concern among manufacturing businesses in particular while increased exchange rate volatility is also a worry.

Head of Business Banking at AIB, Catherine Moroney, says a lot of Irish companies are also putting investment plans on hold:

"Thirty-five percent of Irish businesses have cancelled or postponed their investment plans," Ms Moroney said.

"That has a very real impact on spending in the economy.

"A further 14% are saying 'I am still considering as to whether I will do that or not' so that is a massive change in business sentiment towards investing right now.

"Our hope right now is that that is a temporary thing until we get clarity,"

However, she added that businesses are remaining somewhat optimistic, despite the caution taking hold.

"The piece that is kind of dragging back that positivity is a concern about cost inflation, a concern that profits may be lower and a lack of clarity regarding the impact of Brexit, which is also impacting the profit forecast.

"(There is) also a concern around global trade wars so the businesses, while they are still optimistic, are being more cautious about the outlook."