Just 1 in 8 Irish businesses back Brexit deal before October deadline
THE overwhelming majority of Irish businesses do not believe a Brexit deal will be struck before the October deadline, according to a new survey.
The latest BDO Quarterly Optimism Index, which cover businesses on both sides of the border shows that just one in eight believe a deal will be reach between the UK and EU ahead of the official leaving date in March.
Of the 400 Irish businesses surveyed 88 per cent believe a final agreement will not be reached by the October deadline.
In spite of the headline figure, the survey shows that optimism among Irish businesses for the remainder of the year is strong - indeed it is the highest since the index began seven years ago. The current rate of 70.3 per cent is 37 per cent higher than in 2011.
Irish businesses reported a significantly higher amount of business activity this year with 48 per cent experiencing an increase in business activity this year, compared to 39 per cent during the same quarter in 2017. The number of companies who recorded an increase in operational profit in the second quarter of the year also increased by 11 per cent to 42 per cent in comparison to the same period last year, while the figure has jumped by 34 per cent since 2011.
Brexit is, however, a clear cause for concern among respondents, as the number of indigenous companies reporting higher levels of business activity rose above exporters for the first time since 2012. However this has not quelled expectations, with 60 per cent of exporters stating they believe business levels will be up in the third quarter of the year, compared to 41 per cent a year ago.
Employment levels have remained stable according to the figures, while most companies are maintaining price levels with just one in five charging higher prices compared to this quarter last year.
Carol Lynch, partner of the BDO customs and international trade services department said it is not a surprise that most Irish businesses do not believe a Brexit deal will be agree on time.
"This is understandable given the amount of work that is still to be done on Northern Ireland, border checkpoints and the future trade agreement, along with other items," she said.
"It's also prescient taking into account Donald Tusk's comments from Salzburg requiring clear progress on the backstop in order to continue talks, mean we are left with a short window of less than 20 days to secure results. We are now close to the wire with a high risk of a no deal Brexit happening by default."
Ms Lynch added that the current situation means Irish businesses must make the necessary preparations for Brexit before it is too late.
"It cannot be emphasised strongly enough that businesses need to consider every element of Brexit including border delays supply chains, contracts and price changes," she said.