Monday 23 September 2019

Uncertainty leads to 40pc of SMEs cancelling their investment plans amid 'concerns about the future'

 

Chief among these is ending the so-called backstop that would keep Northern Ireland’s regulations and trade aligned with the EU. Stock image
Chief among these is ending the so-called backstop that would keep Northern Ireland’s regulations and trade aligned with the EU. Stock image

David Chance

The percentage of small and medium-sized businesses here that are being hit by economic and political uncertainty surrounding Brexit has doubled in the past year, according to a new survey by AIB.

The survey, published today, also shows that 40pc of the companies surveyed that had planned to expand or invest in their businesses have since cancelled or postponed those investments while another 16pc were reviewing them. Against this, 3pc planned to accelerate their investment, the survey said.

The poll covered 500 businesses in the Republic and 200 more in Northern Ireland and the results were published as new British Prime Minister Boris Johnson said he was willing to crash out of the EU without a deal on October 31 unless there are major concessions from Brussels.

Chief among these is ending the so-called backstop that would keep Northern Ireland's regulations and trade aligned with the EU.

Of the 200 businesses in Northern Ireland that were polled, 37pc said that Brexit was already having a negative impact and 38pc had either postponed or cancelled investment plans while 10pc were reviewing them.

The most negative results came from manufacturing and tourism businesses in the Republic and in retail and manufacturing in Northern Ireland.

Headache for firms: AIB chief economist Oliver Mangan
Headache for firms: AIB chief economist Oliver Mangan

"The continuing uncertainty and delays to Brexit are a headache for them and they remain very concerned about how Brexit will impact their business in the future," said AIB chief economist Oliver Mangan.

"Meanwhile, the delay to Brexit and the continuing uncertainty this brings is affecting firms, with circa 40pc of SMEs in both jurisdictions saying it is having a negative impact on their businesses," he added.

Among the worst affected businesses are those closer to the Border in Connacht and Ulster, while businesses with 21 or more employees also had lower readings.

So far this year, overall exports from the State have outperformed expectations despite the threat of Brexit, but that has mainly come from large multinational companies exporting pharmaceuticals and technology goods and services to the US.

Smaller, mainly domestic-owned companies are far more dependent on the local economy and the British export market than the bigger multinationals.

Irish Independent

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