Irish firms already reeling from Brexit, survey says

Irish firms already reeling from Brexit, survey says
Irish firms already reeling from Brexit, survey says

Brexit has dragged Irish business confidence levels to a record low, according to a report, with 46% of companies claiming to have been negatively impacted by the uncertainty surrounding how Britain will leave the EU.

The survey, by AIB, shows 53% of companies in the Republic and 66% of those in the North are reviewing, postponing or cancelling investment plans due to Brexit concerns.

Furthermore, while 64% of SMEs in the Republic have begun investigating the implications of Brexit, more than half of SMEs in the North have yet to plan for Britain leaving. “Sentiment has dropped to its lowest levels across most sectors, with key economic sectors of retail, tourism, manufacturing and transport registering a significant decrease,” said AIB’s head of business banking, Catherine Moroney.

“Businesses have told us their three main concerns, in the event of a hard Brexit, are that trade with the UK would be less profitable, Irish customers spending less, and the knock-on effect of a wider economic downturn in Europe,” she said.

The IMF has warned that Britain will suffer economic damage equivalent to the loss of at least two to three years of normal growth between now and the end of 2021 if it leaves the EU without an exit deal.

The world’s fifth-biggest economy could quit the EU as soon as Friday, disrupting its ties with the Union that it joined 46 years ago, if prime minister Theresa May cannot agree a delay with EU leaders today.

The IMF said that even in a relatively orderly no-deal Brexit scenario — with no delays at borders and minimal financial market turmoil — the British economy would grow 3.5% less by the end of 2021 than it would under a smoother Brexit.

The EU economy would suffer too but by much less than Britain, facing an estimated 0.5% hit to GDP compared with a smooth Brexit scenario, said the IMF.

British exports to the EU and other countries which have trade deals with the bloc would face new tariffs and regulatory barriers if Britain reverted to the World Trade Organisation rules favoured by some Brexit supporters.

Additional reporting Reuters

Source: Business News