Only one in 20 firms has plan to deal with Brexit customs border threat
Optimism among Irish retailers has plummeted to a three-year low as anxiety around sterling soars, according to a new business survey.
And just one in 20 firms has a plan in place to deal with a potential customs border with the North following the Brexit vote.
The findings of the latest Optimism Index from business advisory firm BDO, which have been described as "extremely concerning", also discovered that only 14pc of firms have measures in place to deal with lower sterling rates.
The quarterly BDO index tracks business performance and polls the views of business leaders across Ireland.
Commenting on the findings, Michael Costello, managing partner of BDO Ireland, said: "The findings surrounding the lack of preparedness in the event of a hard Brexit are extremely concerning."
Pessimism among retailers is a major concern, he said. "One in four retailers and wholesalers believe quarter four business activity will be significantly reduced compared to this time last year, marking the lowest level of predicted business activity in the quarter for three years."
The BDO index also highlights a significant urban-rural divide between Irish firms indicating a re-emergence of Ireland's two-tier economy.
Over the past two years operating profit growth for Dublin-based firms has far exceeded that of firms outside Dublin.
Since quarter three 2014 the number of Dublin-based companies experiencing higher profits (compared to the same quarter the previous year) has increased from 42pc to 51pc. However, for companies outside Dublin that figure has dropped from 41pc in 2014 to 37pc in 2016.
"The gap in the two tier economy seems to be widening again with stagnated or negative results recorded for businesses outside of Dublin for a range of indicators, including price increases, profits and predicted business activity, suggesting the regions will experience a more turbulent post-Brexit market," said Costello.
The survey by the global accountancy and business advisory firm also found that just 7pc of companies are planning to make price reductions in the new year.
"Quarter three of 2016 saw the emergence of price increases for some business with close to one quarter of companies increasing prices compared to this point last year.
"A further 69pc of companies will maintain prices at the same level as last year and just 7pc are planning on price reductions," the survey found.
"Although Brexit implications will remain unclear for some time to come, ambitious and forward thinking companies are focusing on both the business opportunities and the structuring implications it presents," said Costello.
"Either way, whether an organisation views this uncertainty as a threat or an opportunity they should engage with specialists who can advise them on the complexities of the situation and how to mitigate their risk."
Sunday Indo Business