Expansion plans axed by almost half of smaller firms over Brexit
Almost half of small and medium size businesses in Northern Ireland have postponed or cancelled investment plans due to Brexit, a new report has suggested.
The Brexit Sentiment Index, released today by First Trust's parent company AIB, found just 17% of smaller businesses here had a positive outlook on the impact of Brexit between April and June this year.
It compares with 21%, who said they were optimistic over Brexit in the first three months of 2018.
With just over seven months to go until the UK officially leaves the EU, the index found that 61% of businesses in Northern Ireland now have a negative outlook on Brexit. The same index found 50% of firms expressing negativity over the issue in the first three months of 2018.
The survey, carried out by Ipos MRBI, found there are now more businesses that feel negatively about Brexit in Northern Ireland than in the Republic (58%).
Brian Kearns of the Co Antrim based Camden Group, which manufacturers uPVC doors, windows and frames said his company has enjoyed growth in turnover in the last year, adding 17% to its workforce. But he said the firm has faced additional annual material cost increases of around £1m plus as a result of the decline in the value of sterling.
"We purchase raw materials from Europe and the Far East, where materials costs are priced in euro and dollars, so the weakening of the sterling against both those currencies since June 2016 has had a major effect.
Mr Kearns said the possibility of a hard border remaining is a major concern for a lot of businesses.
"No one wants a return to a hard border, especially not businesses like ours that trade across the Island of Ireland," he added.
The index found that Brexit has had a major impact on the ability of businesses to set out a long-term vision for investing and expanding.
First Trust's head of business and corporate banking Brian Gillan said: "The overall Brexit sentiment trend is something which only goes to reinforce the main source of negativity for NI businesses, identified as the lack of visibility as to what Brexit means for them - with some 89% suggesting visibility was either limited or very limited.
"There is little doubt this lack of certainty is impacting investment decisions here - with one in two investment or expansion plans now being postponed or cancelled as a direct result of Brexit.
"This is a worrying trend which, if it continues, will have a long-term impact on the competitiveness of our local businesses, especially those operating in export markets," he added.