Two-fifths of Northern Ireland firms claim Brexit is damaging their business: report
More than two-fifths of Northern Ireland companies say the vote for Brexit is already having a negative impact on business, a new survey has shown.
Just one in 10 companies quizzed said that they were seeing a positive impact amid the ongoing Brexit negotiations, according to First Trust owner AIB's 'sentiment index' for the third quarter of 2017.
One in five Northern Ireland firms believe they will see opportunities on the back of the UK's exit from the EU.
Brian Gillan, head of business banking at First Trust, said that the "negative impact from Brexit is already being acutely felt by SMEs in Northern Ireland, particularly among retailers and larger businesses, as cost inflation takes hold and squeezes the consumer".
"Sales are down, with 21% of Northern Ireland SMEs reporting lower revenue as a result of Brexit. Investment and expansion plans have also been hampered, with one in three NI SMEs having reviewed, postponed or stopped their existing plans.
He said "not unexpectedly, the optimism and buoyancy" of the tourism and hospitality sector "stands out", with an increase in visitors due to the favourable exchange rate.
Peter McAllister, managing director of Newry specialist drain cleaning and technology firm McAllister Group, said it has felt the impact of a weak pound against the euro.
"We source a lot of our equipment within the EU, particularly Germany, and once sterling started to weaken, it had an immediate impact, as buying equipment became nearly 20% more expensive," he said.
"We had to look at our own costs and try and build them into our pricing. So, you could say that we are dealing with Brexit on a day-to-day basis.
"But it has been business as usual for us, even though the currency fluctuations haven't been helpful."
Two-thirds of Northern Ireland companies said they have "no awareness of tariffs and the implications they might have on their businesses". But the report said: "However, even for those who had some awareness of tariffs, many admitted it was limited."
Catherine Moroney, head of business banking, AIB, said that the "general sense among our SME customers is that Brexit will have a negative impact on both their business and the wider economy and this is backed up" by the new survey.
"While the impact is already being felt, particularly by those invoicing in sterling, most businesses in the Republic of Ireland believe that the greatest challenges lie ahead. However, in Northern Ireland the immediate impact appears greater."
Tom Hall, head of treasury sales, AIB, says that "currency fluctuations continue to be a key and immediate concern for SMEs that export or import".
"Increased volatility in sterling is impacting SMEs across the island of Ireland," he said.
"This research tells us that Republic of Ireland based exporters and Northern Ireland based importers have seen their margins contract materially as the value of sterling has depreciated," he added.