Two-in-three small businesses here have reviewed, postponed or cancelled investment plans because of Brexit, a new report has revealed.
The First Trust/AIB Brexit Sentiment Index suggested that 56% of SMEs (small and medium enterprises) have yet to commit to a Brexit plan.
The survey was carried out by Ipos MRBI during March, interviewing 200 SMEs here and 500 in the Republic.
It showed businesses in Northern Ireland at their most pessimistic since the quarterly index began in the autumn of 2017, with one-in-five reporting lower sales even before the UK leaves the EU.
AIB's Brexit Sentiment Index starts from a baseline of zero, and potentially swings from +100 to -100. For the first three months of 2019, sentiment fell to -38, compared to -31 in the fourth quarter of 2018, and reached an all new low of -52 in the Republic, compared to -41 in 2018.
Among Northern Ireland businesses, those involved with tourism were most pessimistic, followed by retail and manufacturing.
According to the report, the rise in negativity among SMEs is driven by factors including worries about the wider economic impact of Brexit (62%), lack of visibility (63%) and the impact Brexit is having on business now (42%).
The expectation of a hard border remains low at 17% local firms, but increased from 10% at the end of 2018.
However, fear of a hard border remains higher in the Republic (35%). Brian Gillan, head of business and corporate banking at First Trust, said the pessimism was not surprising given the increased uncertainty that businesses were experiencing over the last quarter.
All the interviews were conducted last month as MPs remained deadlocked over a way forward on Brexit.
"All sectors have decreased, with tourism in particular expressing the most negative sentiment," he said. "Businesses continue to be most concerned about the future and Brexit's potential wider economic impacts but despite the uncertainties, we've still not seen any pick-up in their level of Brexit preparedness, with only 44% of NI businesses having started Brexit planning or putting a formal plan in place.
"Reduced investment continues to be prevalent, with 66% of businesses having reviewed, cancelled or postponed pre-Brexit plans."
He urged SMEs to consider and prepare for the potential Brexit impacts on their business, in particular to their cashflow.
"Banks and other key advisors would be a good place to start and can help you understand the challenges and opportunities presented by Brexit."