With just 46 days left until the UK is due to leave the EU, a new survey in Ireland has found that more than half of small and medium-sized enterprises (SMEs) have yet to begin Brexit planning.
The AIB Brexit Sentiment Index also found that the Irish tourism industry is the one already feeling the greatest Brexit impact.
The results come as Minister for Business Heather Humphreys urged businesses to scrutinise their supply chains for risk of exposure when the UK leaves the EU.
According to the AIB research findings, the percentage of SMEs that have reported that Brexit is starting to affect their business has grown to nearly a third.
Covering the final quarter of last year, the study also discovered that one in three small and medium businesses here that had planned to invest in their enterprises have either postponed or cancelled those plans due to Brexit.
The bank says it is worrying that just 8% of businesses have started formal planning for Brexit.
“This is particularly concerning as Brexit, whether hard or soft, will inevitably result in the need for increased working capital to manage businesses cost pressures or possible price inflation should Brexit eventually result in the UK leaving the EU customs union,” said Catherine Moroney, Head of Business Banking at AIB.
The index is based on phone interviews conducted by IPSOS MRBI among 500 SMEs in the Republic of Ireland and 200 in Northern Ireland.
Given the concern that the Brexit threat is causing, it is perhaps no surprise then that over two thirds (68%) of SMEs in Ireland believe it will have a negative impact on their business in the future, up from 63% at the end of September last year.
A little over a quarter of businesses in the Republic now also fear there will be a hard border, the survey found.
Overall, those operating in the food and drink sector are most pessimistic about the Brexit outlook, followed by those in retail and the tourist sector.
However, tourism is the industry that is already feeling the greatest Brexit impact, with 25% of SMEs in the sector reporting lower sales and a fifth seeing higher cost-of-sales.
The impact of the uncertainty on investment is also being felt by businesses in the North, with 40% cancelling or postponing plans due to Brexit.
The state of unpreparedness among businesses in the North is greater than in the Republic, with 56% of SMEs north of the border yet to begin Brexit planning.
Just 10% of Northern Ireland small businesses think there will be a hard border.
Meanwhile, Minister for Business Heather Humphreys has urged businesses to examine supply chains for risk of exposure post-Brexit.
“Some businesses may not think that they will be exposed post-Brexit, but if they trade with the UK, including Northern Ireland, or their supply chain is partly dependent on the UK they will be”, she said.
“I am urging businesses of all scale to put their supply chains under the microscope to check for risks and vulnerabilities to the UK.
“If their business depends on sourcing a product, component or perhaps a service from the UK, their supply chain may be at risk.”
She added that a range of supports are on offer from Enterprise Ireland, InterTradeIreland and the 31 Local Enterprise Offices and information on what actions to take to mitigate supply chain risks.
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