A business sentiment index on over 350 companies shows that 40% of Irish companies now believe that Brexit will have a negative impact on their business.
The “Optimism Index”, carried out quarterly since 2011 by one of Ireland’s leading accountancy firms, BDO, shows that just 14 months after the Brexit referendum, the amount of businesses that believed Brexit would affect their operations negatively has doubled.
Managing Partner at BDO Michael Costello said: “The prospect of Brexit negatively impacting the Irish market is becoming clearer for businesses in Ireland. This survey reveals that previous frustration over the lack of information from government is now changing to a feeling of concern among Irish businesses.
“As the consequences of Brexit become more apparent for Irish businesses, we are encouraging them to engage proactively in scenario planning and assess the possible impact that Brexit will have on their business. We are advising clients to analyse their supply chains and business strategy, so they can isolate their exposure to the British market.“
This quarter saw a dip compared to previous years in business activity and profits. 25% of Irish businesses’ operating profit and activity levels dropped compared to the same period last year. But the survey found that optimism for the next quarter is high where 40% of businesses say activity is expected to increase in the next period. Employment levels have remained pretty much unchanged compared to last year.
Irish prices remain high and continue to increase as the survey found that nearly a quarter (24%) of Irish businesses continue to raise their prices, an increase of five percentage points from last year.
Optimism has slipped slightly from 66.4 in 2016 to 66.17 this year. Medium- and large-sized businesses are the most optimistic at 68.61 and 65.27, respectively.
Mr Costello went on to say: “We are beginning to see businesses coming to terms with what Brexit will mean for them and how it will impact their operations. Ambitious and forward-thinking companies need to focus on both the business opportunities and the tax implications Brexit will have. Whether an organisation views this uncertainty as a threat or an opportunity, they must engage with specialists who can advise them on the tax complexities of the situation and how to mitigate their level of risk.”