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Cork Independent

Business & Professional

Brexit fears mean businesses are delaying capital projects

Wednesday, 13th February, 2019 4:57pm

The increased likelihood of a no-deal Brexit and the lack of certainty is causing SMEs in Cork to become more cautious about spending on capital projects.

The AIB Brexit Sentiment Index for Q4 2018 reveals that 35 per cent of SMEs in the Republic of Ireland (ROI) and 40 per cent in Northern Ireland (NI) that had planned to expand or invest in their business have either cancelled or postponed investment plans due to Brexit.

In addition, 68 per cent of SMEs in ROI believe that Brexit will have a negative impact on their business in the future, up from 63 per cent in Q3 2018.

In comparison, 62 per cent of SMEs in NI believe Brexit will have a negative impact on their business, remaining unchanged from Q3 2018.

Only 10 per cent of SMEs in NI expect a hard border meaning they are far more optimistic compared to their ROI counterparts of whom 27 per cent expect a hard border.

John Ryan, AIB’s Brexit advisor for Cork, said: “The business community in Cork are beginning to understand the systemic impact of Brexit on SMEs, given the supply chain reliance on the UK which will in turn add cost to businesses. We continue to encourage all of our customers to review their business model in light of Brexit and consider the possible impact on their working capital in particular.

“Our online Brexit Ready Check is a quick, useful and free tool, which we have developed to help support SME customers in understanding their business exposure to Brexit and we would encourage all SMEs to use this tool,” he added.

The Brexit Sentiment Index baseline is zero, with a potential range from +100 to -100. For Q4 2018, the Index registered a score of -41 in the ROI, from -41 in Q3, and -31 in Northern Ireland for Q4 2018 from -35 in Q3 2018. The index shows SMEs operating in food and drink are most pessimistic (-53) notably ahead of retail (-45) and tourism (-42).

AIB’s Brexit Sentiment Index conducted by Ipsos MRBI is a quarterly survey of more than 700 SMEs in the Republic of Ireland and Northern Ireland that assesses the attitudes of SME business leaders on Brexit and the impact on their businesses.

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