Few firms have plan for Brexit

SEVEN out of ten of Irish businesses say Brexit will have a negative economic impact – but only 6% have a contingency plan in place.

Manufacturing, retail and tourism sectors are most negative about impact of Brexit on the Republic of Ireland, according to the survey by AIB, with only larger businesses likely to have already put a plan in place.

The AIB Brexit sentiment index also reveals that 58% of small and medium enterprises believe that Brexit will have a negative impact on their own future trading prospects.

The UK is due to leave the European Union at 11pm on Friday, March 29, next year. But recent suggestions that both sides could invoke provisions in Article 50 for a one-year extension of negotiations could also be planning a part in companies’ lack of planning, despite the deadline.

Businesses in the food and drink sectors are most likely to have a Brexit plan in place (11%), followed by tourism (9%) and transport (7%) outlets.

Catherine Moroney, head of business Banking AIB, said it was ‘critical to plan for the worst now’. She explained: ‘When businesses seek financing, one of the key questions we in AIB ask them about is their business’s Brexit readiness, and the potential impact Brexit may have on them in a more hardline Brexit scenario.

‘Our sentiment index research in the last quarter of 2017 showed that one in five Irish exporters were considering new markets (to compensate for a Brexit fall-off in business with the sterling area).’

AIB has now launched a free export credit check and put a €122million SBCI Brexit loan fund in place to support shorter term investment and working capital for client companies anxious to diversify.

The survey was conducted by Ipsos MRBI among more than 700 SMEs across the island of Ireland.