Bulk of ex­port­ing firms still ‘not ready for Brexit’

Irish Independent - Business Week - - BUSINESSWEEK - Colm Kelpie

THE head of En­ter­prise Ire­land has said she has no cause for op­ti­mism over Brexit as a new sur­vey sug­gests the ma­jor­ity of ex­port­ing firms still aren’t pre­par­ing for the UK’s with­drawal from the EU.

Julie Sin­na­mon said firms have been in de­nial, and warned that they must start plan­ning for a hard Brexit. She said the Brexit im­pact here is the most sig­nif­i­cant change for busi­nesses ever seen, and sig­nalled that Euro­pean state aid rules may need to be re­laxed to help strug­gling firms.

“I have no rea­son for op­ti­mism,” Ms Sin­na­mon said. “I think there is so much up in the air, and there are po­si­tions be­ing taken by peo­ple. I don’t have any warm feel­ing that it will be al­right on the night and we should just for­get about this.

“I ac­tu­ally think that we ab­so­lutely need to plan for a hard Brexit and we don’t know where it will end up.”

Ms Sin­na­mon told the Ir­ish In­de­pen­dent ear­lier in the year that with the trig­ger­ing of Ar­ti­cle 50 last March, busi­nesses were be­gin­ning to wake up to the re­al­ity that Brexit was go­ing to hap­pen.

But a sur­vey re­leased by the state agency yes­ter­day shows that the num­bers putting prepa­ra­tions in place are in the mi­nor­ity. The sur­vey found that in the last six months, just 38pc have taken mea­sures to re­spond to Brexit, with 62pc do­ing noth­ing.

“It [the fig­ure] prob­a­bly is lower than I ex­pected, just from the level of en­gage­ment that we’ve had,” Ms Sin­na­mon said.

Ex­porters have been the early ca­su­al­ties of the Brexit vote, due to ster­ling’s im­me­di­ate, and dra­matic, de­val­u­a­tion in the wake of the ref­er­en­dum last June. Al­though it had set­tled around the 85p mark to the euro, it moved above 90p in re­cent weeks heap­ing fur­ther pres­sure on those sell­ing into the UK mar­ket, in­clud­ing the farm­ing com­mu­nity, and the tourist and hos­pi­tal­ity sec­tor here. Yes­ter­day €1 was equal to 91 pence.

Ms Sin­na­mon said the re­newed pres­sure on ster­ling will have helped push busi­nesses into get­ting Brexit-ready. “I do think that in the last month or six weeks it [prepa­ra­tion] re­ally has ac­cel­er­ated. Ini­tially, com­pa­nies were prob­a­bly in de­nial. Now com­pa­nies recog­nise that this is go­ing to hap­pen, and they have to take steps.”

Ms Sin­na­mon was speak­ing on the mar­gins of the first day of En­ter­prise Ire­land’s In­ter­na­tional Mar­kets Week, in which the agency’s se­nior ad­vis­ers from around the world re­turn home for a fo­cused event at the RDS de­signed to help ex­port­ing firms break into new mar­kets. She told those at­tend­ing that the cur­rency weak­ness was “not a blip”.

“We re­ally see that the Brexit im­pact in Ire­land is the most sig­nif­i­cant change for Ir­ish busi­ness that we have prob­a­bly ever seen”

She sug­gested Euro­pean state aid rules should be re­laxed to al­low sup­ports to be pro­vided to busi­nesses.

“In pre­vi­ous crises, there was a re­lax­ation of state aid. We need to have dis­cus­sions in or­der to make sure that we aren’t dis­ad­van­tag­ing our clients,” she said.

The sur­vey, of more than 400 En­ter­prise Ire­land clients, found that 65pc of those who are not yet ex­port­ing to the eu­ro­zone plan to en­ter the mar­ket in the next 12 months.

An­other key find­ing is that some 44pc con­sider the eu­ro­zone to be one of the main tar­get re­gions for their busi­ness, with 30pc se­lect­ing North Amer­ica and 15pc Asia Pa­cific.

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