Brexit – Have you a Plan in Place?

20th August 2018

Posted In: The Topic

70% of Republic of Ireland businesses say Brexit will have a negative economic impact but only six percent have a plan in place. That’s according to AIB’s Q2 (2018) Brexit Sentiment Index just released.

Highlights indicate that manufacturing, retail and tourism sectors are most negative about the impact of Brexit in Republic of Ireland (ROI);  Larger businesses are more likely to have a Brexit plan in place; And the impact on the economy and tariffs are the main concerns for businesses in the Republic. AIB’s Brexit Sentiment Index conducted by Ipsos MRBI is a quarterly survey of more than 700 SMEs in the Republic of Ireland and Northern Ireland that assesses the attitudes of SME business leaders on Brexit and the impact on their businesses.

Results from the Q2 2018 index just released reveals that 58% of SMEs in the Republic of Ireland believe Brexit will have a negative impact on future business, while 70% believe it will have a negative wider economic impact. Only six percent of ROI businesses in the ROI have a formal Brexit business plan in place, with only five percent of their Northern Ireland (NI) equivalents having a plan.  In RoI, businesses in the food and drink sectors are most likely to have a plan in place (11%), followed by tourism (9%) and transport (7%).

The Brexit Sentiment Index baseline is zero, with a potential range from +100 to -100. For Q2 2018, the Index registered a score of -37 in both ROI and NI compared to -41 in RoI and -31 for NI in the first quarter of the year.  This means RoI is becoming slightly less negative in their outlook when it comes to the impact Brexit may have on their business than in Q1 2018.

Catherine Moroney, Head of Business Banking AIB said “Manufacturing, retail and tourism sectors continue to report the most negative Brexit sentiment.  The results also indicate that larger businesses are more likely to have a formal Brexit plan.

“It’s critical to plan for the worst now.  When businesses do seek financing, one of the key questions we in AIB ask them about is their business’ Brexit readiness and the potential impact Brexit may have on their business in a harder line Brexit scenario.  Our Brexit Sentiment Index research in Q4 2017 showed that 1 in 5 Irish exporters were considering new markets.  To support our customers who are increasing their market reach, and those with exposure to the UK, AIB has launched a free export credit check in collaboration with Euler Hermes.*  We have also put a €122m SBCI Brexit loan fund in place to support shorter term investment and working capital.  Our local Brexit advisors are in place to support and assist businesses to navigate through Brexit and I encourage businesses to contact their local AIB to discuss how we can support their Brexit readiness.”

You can find out more here>>

*The Euler Hermes credit check is a free risk assessment on five potential or existing overseas clients to provide greater peace of mind to gauge the likeliness of getting paid by them.