Survey finds three in ten expect CEOs lower profits over the next three years as a result of Brexit
Almost seven in ten (68%) Irish CEOs have said they have acted to mitigate against the potential impact of Brexit, according to a survey of Irish business leaders issued by Deloitte and Enterprise Ireland. The main areas of mitigation action included scenario planning, changes to supply chain and engaging with government and other agencies.
95% of Irish CEOs have said a ‘no deal’ Brexit would have a negative impact on the economy and 59% think it would have a negative impact on their business. Furthermore, 45% said delays in the Brexit deal decision making process were negatively impacting business operations.
Four in ten (44%) said that Brexit had impacted their business over the past 18 months, while almost six in ten (56%) said it had not impacted. Of those who said it had an impact the majority cited a negative impact.
When asked what impact Brexit would have on their business over the next three years three in ten (31%) reported that they thought they would have lower profits, while 10% thought they would have slightly higher or higher profits. A third (34%) reported a negligible change and a quarter (25%) said they did not know or that it was not applicable.
Nine in ten (93%) Irish CEOs said they are confident about their companies’ prospects for revenue growth in the next year.
Eight in ten (84%) Irish CEOs are planning to expand over the next 12 months. The Eurozone (27%), UK (21%) and North America (20%) were considered the top ‘new markets’ to offer opportunity to grow exports. When asked to identify the markets/countries, within the Eurozone, that offer the most potential/opportunities for their business, respondents listed Germany, France and The Netherlands as the top three.
Challenges for CEO include Brexit and US Tax reform
The top challenges cited by CEOs included availability of skills, retention of talent and competitiveness.
Nine in ten (92%) are concerned that macro-economic issues would impact Ireland’s competitiveness and the top concerns were Brexit, US tax reform, currency fluctuations and Irish tax.
Brendan Jennings, CEO, Deloitte said:
Despite the uncertainty surrounding Brexit, US tax reform, currency fluctuations and Irish tax, Irish business leaders remain optimistic. It’s really interesting that confidence in revenue growth is high among CEOs, but longer term we see that they are more cautious with three in ten expecting lower profits over the next three years as a result of Brexit. Brexit is a concern and for those businesses who have yet to put preparedness plans in place, they should consider doing so now to ensure they are fully aware of both the challenges and opportunities.
Julie Sinnamon, CEO, Enterprise Ireland commented:
The survey results reflect that business leaders have ambitious plans for future growth with 84% of CEOs planning to expand their business overseas in the next year, citing the Eurozone as one of the key markets with strong market growth potential. The Eurozone provides many advantages including a market of 350m people, currency stability and common standards for Irish companies looking to export and we are encouraging Irish exporters to view it as an extension of their home market.
“As the Brexit negotiations continue, we are supporting Irish companies to consolidate exports in the UK market, while at the same time, accelerating our market-diversification strategy, helping more Irish companies to build scale and expand reach in high growth markets,” concluded Julie Sinnamon.