Brexit vote anxiety causes dip in business confidence
Business confidence across the island of Ireland dropped "dramatically" in the first half of the year, as firms awaited the outcome of the UK referendum, a survey shows.
The latest Global Economic Conditions Survey for the second quarter, from the Association of Chartered Certified Accountants, shows a dip in confidence across the OECD linked to the Brexit referendum. In Ireland, around 100 firms were surveyed from both Northern Ireland and the Republic. But the survey was carried out in the first three weeks of June, ahead of the referendum in the UK on June 23.
"There has been a dramatic drop in business confidence in Ireland over the past two quarters, even though its economy continues to grow at a breakneck pace," the report stated.
"Ireland's trade links with the UK are stronger than those of any other Eurozone economy." The report noted that any downturn in the UK will be felt heavily in Ireland.
Liz Hughes, head of ACCA mainland Europe and Ireland, said the UK's decision to leave the European Union will be felt globally for the foreseeable future with Ireland being at the forefront of many of those implications.
"It is our expectation that business sentiment will fall again in Q3 and, depending on policy responses and other factors such as leadership and EU decisions, potentially extend into the fourth quarter," Ms Hughes said.
"The potential for long-term uncertainty as the UK negotiates its departure from the EU could weigh down on global confidence for some time to come."
Globally, the survey found that business confidence picked up in the second quarter compared with the four-year low in the first three months of the year.
The number of firms that said their prospects had deteriorated over the past three months fell to 43% in the second quarter, from 48% posted in the early part of the year.
Meanwhile, polls by Reuters showed that confidence in prospects for the global economy has been dented following the Brexit vote.