By Business & Finance 
82% of Irish businesses expect Brexit to negatively impact their business over the next three years, according to the latest Navigator report from HSBC.
Businesses surveyed predicted an increase in the cost of doing business as their number one concern (70%), closely followed by disruption to buyer/supplier relationships (60%). Almost 70% are intending to increase their focus on strategic suppliers as a result, more than three times the global average of 22%.
Despite this, only half of Irish respondents believe that foreign governments are becoming more protectionist, well below the global average of 63% but swing the other way in the case of regulation – 61% of firms see this as increasing the cost of business, compared with 34% globally.
The findings come from the latest HSBC report which combines an economic forecast of medium to long-term bilateral trade and a global survey gauging business sentiment.
Positive outlook for trade
Despite their concerns, Irish firms are broadly upbeat about future trade prospects, with almost three quarters of businesses surveyed (74%) expressing a positive outlook for international trade. 90% of respondents expressed confidence in their ability to succeed in the current international trading environment, which was higher than the global average of 81%.
Despite the concerns around the implications of Brexit, the UK remains the priority growth market for Irish businesses (36%) along with Germany (14%) and France (11%).
Data and business strategy
Irish businesses are also focused on harnessing the power of data to inform their business strategy. 78% of Irish businesses are utilising data to optimise their company’s performance, positioning them broadly in line with their global counterparts. However, the results also showed that while there is a move towards data innovation in business strategy, increasing regulations around data compliance present a challenge for businesses with the report showing that over a quarter of those surveyed remain noncompliant with data protection requirements.
Speaking about the survey’s findings, Alan Duffy, HSBC Ireland CEO commented:
While the data shows that Brexit is a concern for those surveyed, businesses are putting measures in place to limit any negative impact arising. Key measures businesses should be considering to respond to these concerns include investing in customs and trade expertise to support cross-border movements in the event of new trade barriers and mapping and establishing supply chains to identify exposure to potential new tariffs and customs checks.
He continued, “All in all, the survey points to a reasonable degree of positivity and confidence among Irish firms, buoyed by a strong domestic economy. It is interesting to note the UK remains the priority growth market for Irish business, but their upcoming departure from the European Union may well force a reappraisal of their future importance as an export market.”
Global trade outlook
Overall there is a largely positive outlook for the international trading environment with nearly four fifths of businesses worldwide responding positively. Businesses expect trade to be driven by increasing demand, a favourable economic environment and greater use of technology. However, tariffs and the US-China trade dispute are concerns for businesses globally, with apprehension around increasing protectionism cited by companies as the main reason for their negative outlook on company success over the coming years.
The survey also shows that more than half of companies (51%) expect that free trade agreements, where they apply to country and industry, will benefit them over the next three years. Looking at growth drivers within their direct control, the top two priorities for companies over the past two years have been to expand into new markets (28%) and into new products or services (25%). Looking ahead two years, their top priority (31%) is to grow market share, closely followed by an emphasis on skills development and productivity enhancements (29%).
