More than half of businesses here haven’t started planning ahead

BREXIT continues to impact the Northern Ireland economy, with 40% of small and medium enterprises cancelling or postponing investment plans amid ongoing uncertainty, it has emerged.

The AIB Brexit Sentiment Index also revealed that 56% of SMEs here and 52% in the Republic of Ireland have yet to begin Brexit planning.

The survey shows that 62% of SMEs in Northern Ireland believe Brexit will have a negative impact on their business, compared with 68% in the Republic.

When it comes to concerns about a hard border, businesses here are more optimistic than their counterparts south of the border, with only 10% of SMEs here expecting a hard border, compared to 27% of SMEs in the Republic of Ireland.

The Index is a quarterly survey of more than 700 SMEs in the Republic of Ireland and Northern Ireland, that assesses

the attitudes of business leaders on Brexit and its impact on their businesses.

Brian Gillan, head of business and corporate banking at First Trust Bank, said: “Despite the conclusion of the EU withdrawal agreement negotiations, and the subsequent parliamentary deliberations in Westminster, there has been no significant change in perceived Brexit visibility in Northern Ireland and only a slight improvement in Republic of Ireland.

“For most SMEs on both sides of the border, Brexit is apparently more of a future threat than a current reality — right now with this lack of visibility, and concern about future business impact and the potential for wider economic impact weighing heavily on sentiment. In so far as Brexit has already disrupted businesses, currency fluctuations have had the most tangible impact in Northern Ireland with 41% of companies reporting that Brexit has already made their cost of sales higher, with the tourism sector most impacted at 50%, even if a relatively favourable tourism environment may have masked the full impact of Brexit so far.

“Uncertainty is also weighing on investment confidence, with 40% of those who had planned to invest or expand stating these plans have been postponed or cancelled as a direct result of Brexit.”

Mr Gillan said a further indication of the caution being shown was that bank borrowing has also been impacted, with 12% of businesses postponing such investment.

He continued: “The longterm impact of these delayed decisions could be one of the lasting legacies of this period as they could damage the competitiveness of local businesses, especially those wishing to compete in global markets, wherever they may be post-Brexit.”

He also said it is not too late for businesses here to begin planning for Brexit, stressing that any preparation will give them an advantage compared to doing nothing.

He added: “Banks and other key advisors would be a good place to start and can help you understand the challenges and opportunities presented by Brexit.”