Two in five SMEs negatively impacted by Brexit
TWO in five small businesses in the north have been negatively impacted by Brexit according to a new all-island survey.
The AIB Brexit Sentiment Index for the last quarter of 2017 has revealed that 41 per cent of Northern Ireland SMEs have already experienced a negative impact from the UK's landmark decision to leave the EU. This is in contrast to the Republic where just 21 per cent of respondents has reported a negative impact.
The new figures further show that just 2 per cent of SMEs in the north currently have a formal Brexit plan, compared to 6 per cent in the Republic.
Two out of three businesses in the north report that pre-Brexit investment plans have either been reviewed, postponed or cancelled, while the continued weakness of the sterling has resulted in 62 per cent of SMEs reporting a higher cost of sales.
In Northern Ireland, the retail and hospitality & tourism sectors continue to be the most downbeat due to Brexit.
In terms of investment, of the 44 per cent of SMEs that had plans to invest, 51 per cent have cancelled or postponed these plans while 13 per cent are currently reviewing them. By contrast in the Republic of the 36 per cent planning to invest, 28 per cent are reviewing the plans, while 24 per cent have cancelled or postponed them indefinitely.
The weakness of sterling is continuing to have a considerable impact on the cost of sales for SMEs in the north according to the survey, with some 62 per cent of SMEs reporting a higher cost of sales because of Brexit.
Head of business and corporate banking at First Trust Bank, Brian Gillan said the immediate impact of Brexit continues to be felt hard in the north.
"I've no doubt that the absence of political leadership and a functioning Northern Ireland Assembly is not helping business confidence in already challenging times," he added.