SMEs across the entire island of Ireland are already feeling the impacts of Brexit according to the latest inaugural AIB Brexit Sentiment Index for the third quarter 2017.
The quarterly index of over 700 SMEs in the Republic of Ireland (ROI) and Northern Ireland (NI) has been designed to measure and track the impact of Brexit uncertainty on SMEs across the Island of Ireland, in the run up to the March 2019 deadline. The Brexit Sentiment Index baseline is zero, with a potential range from +100 to -100.
The index shows that SMEs in ROI are slightly more pessimistic, registering -41 on the sentiment index, compared to SMEs in NI at -38. With participants across a broad range of sectors, sentiment is currently similar for SMEs in both ROI and NI. However, a greater proportion of businesses in NI have experienced an immediate Brexit impact, and SMEs throughout the island of Ireland do not believe this will improve in the immediate future.
Currency fluctuations are benefiting those in ROI that are importing from the UK (51% of SMEs do so) while the 20% who export to the UK have been feeling the cost of weaker sterling. Some of these SMEs are both importing from and exporting to the UK, so have some opportunity to lessen their currency exposures.
These fluctuations are also impacting the cost of sales on both sides; only 10% of SMEs in ROI believe the cost of sales are higher as a result of Brexit, compared to 56% of SMEs in NI. When it comes to future planning, more SMEs in NI (31%) are currently reviewing, postponing or cancelling plans to invest or expand the business compared to 18% of SMEs in ROI.
In individual sectors, the Tourism & Hospitality sector in ROI is least optimistic, so ranked lowest on the Brexit Sentiment Index at -51, compared to Retail -41, Transport & Logistics -41, Manufacturing -40, Technology, Media and Telecoms -38, Food & Drink -35 and Professional Services -31.
The research shows that 69% of SMEs in ROI are not aware of tariffs that might impact their goods / services compared to 65% of NI SMEs surveyed. Furthermore, 63% of ROI SMEs surveyed believe the border will be close to what we have now, slightly more SMEs in NI agreed with this statement at 76%. Overall, ROI SMEs were less optimistic about a soft border; 37% surveyed believe there will be a hard border, compared to 24% of NI SMEs.
Article Source: Business World