Brexit ‘is already a problem’ for one in four small firms

MORE than a quarter of small businesses here say Brexit is having a negative impact on them – and that’s with Britain still in the EU, a new survey has shown.

And in the North the figure is even higher at 41%, while just 8% of bosses in the Republic believe Brexit is having a positive impact on their businesses.

The quarterly index of more than 700 small firms ‘has been designed to track the impact of Brexit uncertainty on SMEs [small- and medium-sized enterprises] across Ireland, in the run-up to the March 2019 deadline’, said AIB, which commissioned the ongoing poll. The Brexit Sentiment Index baseline is zero and ranges from +100 to -100. It found: ‘Overall, SMEs in the Republic are slightly more pessimistic, registering -41 on the sentiment index, compared to SMEs in NI at -38.

‘With participants across a broad range of sectors, sentiment is currently similar for SMEs in both the Republic and Northern Ireland. However, a greater proportion of businesses in Northern Ireland have experienced an immediate Brexit impact, and SMEs throughout the island do not believe this will improve in the immediate future.’

The report goes on: ‘To date, currency fluctuations are benefiting those in the Republic that are importing from the UK – 51% of SMEs do so – while the 20% who export to the UK have been feeling the cost of weaker sterling. Some of these SMEs are both importing from and exporting to the UK, so have some opportunity to lessen their currency exposures.’

Sterling has slumped in value by more than 15% since Britain voted for Brexit in 2016, making Irish imports more expensive for British buyers. Britain is one of the country’s biggest trading partners with business worth more than €1billion a week.

AIB’s retail and commercial banking boss Robert Mulhall said the bank has 21 ‘Brexit advisers’ across Ireland. ‘We find a lot of businesses are not yet preparing for Brexit, given the lack of clarity,’ he said. ‘We strongly encourage them to plan on the basis of a worstcase scenario.’

Meanwhile, a survey by the Irish SME Association also found Brexit is a major worry for small businesses. It is cited by 21% of companies as their ‘biggest concern’, and Isme chief Neil McDonnell said: ‘This is consistent with our membership’s concerns.’