Northern Ireland businesses ‘did not have plan for Brexit’
An overwhelming majority of Northern Ireland businesses say they had no plans on how to deal with Brexit leading up to the referendum, a new survey has shown.
Around a fifth of Northern Ireland companies say they now expect to decrease their level and speed of planned investment, according to IntertradeIreland’s quarterly business survey.
And it’s the hospitality sector which is most pessimistic about a negative impact caused by Brexit.
Questioned in the days after the vote on June 23, 84% of companies said they were expecting a downturn.
That was higher than the other sectors, with around half of manufacturing, construction and services firms saying they were expecting a slowdown.
A quarter of firms in Northern Ireland said they think Brexit will have a negative impact on cross-border sales.
However, in the Republic, more than double that number — 57% of businesses — said cross-border sales would fall as a result of the UK’s vote to leave the EU.
Around two-thirds of Northern Ireland businesses said they wanted to keep access to the single market, along with the free movement of people.
Aidan Gough (below), strategy and policy director at InterTradeIreland, said it is “evident” in the latest survey that the outcome of the EU referendum has “caught many businesses on the hop and introduced a large degree of uncertainty into the marketplace”.
“Clearly businesses will need support particularly in the provision of timely and relevant information to assist them to adjust to any new trading relationships that emerge from Brexit negotiations,” he said.
“In the short term, while companies will still trade under the same rules and regulations, we would encourage them to hedge any exposure their business may have to volatile movements in the sterling and euro exchange rate.”
In Northern Ireland, more than half of companies said their businesses were “stable”, with 31% saying they were growing and 13% suffering a decline.
Concerns among businesses have also changed since the previous survey, with 14% more businesses questioned saying exchange rates were an important issue, along with energy costs, overheads and a lack of skills.
Other issues, including cash flow, new competitors and access to finance remain important to many firms, but dropped significantly in importance, according to the report.
“We encourage businesses, particularly small and medium sized enterprises, to continue to exploit the cross-border market, taking a planned approach to export development or supply chain management,” Mr Gough said.
“We may see uncertainty continuing in forthcoming quarters while companies adjust to changing realities. However, it is encouraging that almost two-thirds of businesses on the island state that they have ambition to grow in the immediate future.
“Resilience in the face of any adversity remains high and this can be seen across each of the sectors.”