Brexit is weighing heavily on Irish businesses' future prospects
Three-fifths of SMEs expect the UK vote to have a negative impact on their trade.
BUSINESS CONFIDENCE HAS crashed following the Brexit vote, with three-fifths of small- and medium-sized operators expecting that the UK leaving the EU would have a negative effect on their trade.
The latest ISME quarterly business trends survey, which polled nearly 1,000 small- and medium-sized operators, showed a drop in 10 out of the 12 indicators it tracked.
It came after UK voters last month elected to leave the EU, a decision which is predicted to have a chilling effect on many Irish businesses – especially in the SME sector.
ISME noted the sentiment in its survey had already been trending downwards in the first three months of the year, before the vote, and it had plunged further following the landmark poll.
The overall confidence level among the respondents, as well as their expectations for profitability and employment, were at their lowest ratings since spring 2013.
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Brexit shock
ISME chief executive Mark Fielding said it wasn’t surprising the figures were negative, given that the survey was taken in the week immediately after the Brexit vote.
“The initial post-Brexit shock with the sterling drop in value has combined with the ongoing increasing business costs, continuing difficulties in accessing bank finance and late payments to reduce SME business confidence,” he said.
Nevertheless, all of the indicators in the survey were still in positive territory – pointing to businesses’ overall belief they could continue to expand despite a likely hit to their bottom lines from reduced UK demand and pressure from the lower pound.
The services sector reported the biggest drop in confidence and other indicators following the vote, while the manufacturing and retail industries showed relatively strong survey results.
Fielding said Ireland needed to “remain ever vigilant on our cost and tax competitiveness”, particularly with the “new external factors to overcome”.
“Competitiveness is the goal, productivity the measure and survival the result,” he said.
