Brexit strikes fear into Irish firms, but few ready for change

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Brexit strikes fear into Irish firms, but few ready for change


Stock photo: PA
Stock photo: PA

Irish companies are the most pessimistic they have been in eight years as Brexit approaches, according a new survey published this morning.

And with the UK’s departure from the EU just weeks away, a worrying number of manufacturing and services businesses have still no firm plans to deal with what is arguably the biggest economic upheaval many of them will ever face.

The survey, for AIB’s business activity report, was undertaken by IHS Markit among 650 businesses in the Irish manufacturing and services sectors.

It found that just 16pc of those companies have a written Brexit plan, and only 54pc of them have done “some investigating” into planning for Brexit.

That’s despite numerous Brexit-planning events that have been held all over the country by Government and industry agencies over the past year.

Meanwhile, the Economic and Social Research Institute (ESRI) will today warn that a global economic slowdown will reduce the pace of expansion here this year and next, regardless of Brexit.

In its quarterly report, the ESRI cut its growth forecast to 3.8pc for 2019 from 4.2pc. The economy grew by 6.7pc last year. It expects growth of 3.2pc in 2020 and said there would be a shift from the export-driven growth of recent years to consumption and investment.

The ESRI warned yesterday that if Britain left the EU without a deal or transition period, growth would be just 1.2pc this year and 2.4pc in 2020.

Brexit is also hitting hiring plans, the AIB survey found. A net balance of just 18pc of firm surveyed said they will continue with staff increases – the lowest level since June 2012.

And of those expecting to continue hiring, many feel their ability to recruit skilled labour will be hampered, according to the AIB report.

However, the ESRI pointed out this week that it’s “reasonable to assume” that Ireland will experience higher immigration as a result of Brexit.

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“Good English-language skills are a valuable form of human capital and this factor combined with Ireland’s relatively favourable growth prospects (even in the context of Brexit), may mean that potential EU migrants will be willing to move to Ireland in the future if they are no longer able to go to the UK,” said the ESRI report.

AIB’s head of business banking, Catherine Moroney, said the survey was undertaken near the end of February, and that uncertainty has probably increased in recent days.

Ms Moroney said Irish businesses sentiment still remains positive.

“Irish businesses are still more optimistic than their European counterparts and positive overall in their outlook,” she said.

Irish Independent

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