Two in five Northern Ireland firms ‘have had negative Brexit impact’

MORE than 40% of Northern Ireland firms say the vote for Brexit has had a negative impact on business, a new report has said.

The latest AIB survey on Brexit also warns that two out of three businesses in Northern Ireland that had pre-Brexit investment plans have reviewed, postponed or cancelled those plans.

It also reports that the weak pound is continuing to have a major impact on firms here, with around two-thirds of small and medium enterprises (SMEs) reporting a higher cost of sales.

The Brexit survey for the last three months of 2017 shows that just 2% of businesses in Northern Ireland have a formal plan put in place to deal with the UK’s exit from the EU.

That contrasts with 6% in the Republic.

And it’s the retail, hospitality and tourism sectors which are the most negative when it comes to Brexit, according to the survey.

It also says that 15% of “export focused SMEs” in Northern Ireland are “looking into expand- ing into new markets with the Republic of Ireland, wider Europe and North America leading the way”.

The survey reports that half of the 44% of firms which said they had plans to invest, have since postponed those plans.

Of the third of firms in the Republic which had plans to invest in their businesses prior to the Brexit vote, 28% are currently reviewing them, while 24% have cancelled or postponed them indefinitely.

Brian Gillan, head of business and corporate banking at First Trust Bank, commented: “The immediate impact of Brexit in Northern Ireland continues to be felt hard by our local SMEs, with 41% having already experienced a negative impact compared to 21% in the Republic of Ireland.

“The second wave of AIB Brexit Sentiment Index indicates that many are concerned about the decline in consumer confidence and spending as well as the impact it is having on the costs of sales.

“It’s also concerning that two out of three businesses in Northern Ireland that had pre-Brexit investment plans have either reviewed, or postponed or cancelled those plans.”

Mr Gillan added: “I’ve no doubt that the absence of political leadership and a functioning Northern Ireland Assembly is not helping business confidence in already challenging times.”

AIB chief economist, Oliver Mangan, commented: “The sharp depreciation of sterling over the past two years continues to be the main impact of Brexit on businesses.

“It is particularly acute in Northern Ireland where sterling’s weakness has increased the cost of sales.”