05 May 2017

Half of Irish SMEs say they’ve felt no fallout from Brexit, so far

Filed under: Business News

About half of small businesses have so far experienced no impact from the Brexit vote, a Government-backed survey has found.

But looking ahead over the coming 18 months, only a quarter feel as confident.

The smallest firms are feeling the squeeze the most, with 13pc claiming to be strongly impacted by the vote, highest among micro businesses.

The study comes as business representatives briefed the Seanad Brexit committee yesterday, with the Small Firms Association warning that about half of its members had put off investment decisions as a result of last June’s referendum.
Patricia Callan, head of the SFA, said the Government needs to move on from the analysis phase to introduce tangible Brexit support measures for businesses.

“In relation to the specific impacts of Brexit on our member companies, over half have already postponed investment decisions, with 37pc stating that this is a likely impact into the future. 37pc have already experienced a loss of business in the UK market, whilst 45pc anticipate this to be an impact into the future,” Ms Callan said.
She drew attention to an SFA member company in the consumer foods industry, which said that it had already withdrawn from UK accounts worth almost €3m.

And she urged the Government to step in and provide support to those in the food sector in particular.
“The Government needs to step in now to save our export and in particular food sector, which has the potential to be wiped out before Brexit even happens. Financial support schemes targeting the exporting sectors (and not just existing State Agency clients) should be made available as a matter of urgency,” she said.

But the survey of 1,045 small and medium-sized companies suggested the impact was relatively minimal so far.
It said there was limited projected outcome in terms of short term investment decisions, but in the longer term there is expected to be some “low level” impacted, particularly among those exporting to the UK and non-food SMEs.

The survey, released in the wake of the committee meeting, stated that Brexit is most acutely felt among exporters and smaller businesses. About a quarter of the companies surveyed are in the food industry. And it claimed that price competition from UK suppliers on the Irish market has increased, particularly in the food industry.
Over the coming 18 months, 13pc of the 1,045 SMEs surveyed said they expected minimal impact, while 44pc said there would be “some” effect.

Ibec campaign lead Arnold Dillon said that while the economy is performing strongly, there are some worrying trends as both consumer spending and exports slowed compared to previous years.

He warned that unless there is some form of rethink, a customs border appears inevitable. “This presents the potential for major economic disruption, along with massive logistical headaches,” Mr Dillon said. “In a worst case scenario, under current WTO rules, this could mean some meat cuts would attract over 50pc tariffs, with dairy over 30pc.”

“Irish indigenous exporters, of which food is two-thirds, make up 10pc of our exports, but they employ more and spend more in the domestic economy than the entire multinational sector.”
John McGrane, of the British Irish Chamber of Commerce, said business representative groups, along with think tank the IIEA, should come together to help provide solutions and feed into Government thinking.

Article Source: http://tinyurl.com/kbwqb42

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