Earlier this week, Ibec launched the results of a major new Brexit survey with Minister for Foreign Affairs and Trade Simon Coveney at the All-island Civic Dialogue in Dundalk. The survey shows that a large majority of companies are now actively engaged in Brexit planning, despite the massive uncertainties that remain.
Over one in five companies (21%) already have contingency plans in place, while over half (53%) will have plans in place over the coming months. Contingency planning has accelerated, despite the recent political agreement on a transition period to the end of 2020.
Businesses remain deeply concerned about the Brexit talks and are planning for all eventualities. The issues of most acute concern to companies are customs and certification barriers (identified as top concern for 20% of companies), future regulatory divergence (13%), and exchange rate volatility (13%).
Ibec CEO Danny McCoy said: “Business is actively working to support an outcome that delivers close EU-UK alignment into the future, but major obstacles exist. The type of EU-UK free trade agreement that currently seems likely would amount to a significant deterioration of the current economic relationship and would come with a heavy economic cost.”
Key additional survey findings (see full report here):
Impact on business: Brexit was expected to impact negatively on exchange rate movements for 47% of companies, the cost of custom compliance procedures with NI/GB (45%), pricing (32%), level of imports from the UK (31%) and on the value (29%) and volume of exports (27%). A more positive than negative outcome for businesses due to Brexit was expected on the ability of respondents to win new inbound investment projects (20% positive impact, 7% negative impact), on investment plans in Ireland (19% positive impact, 14% negative impact) and on the sourcing of staff from the UK (16% positive impact, 10% negative impact).
Contingency planning: Over one in five companies (21%) already had a contingency plan in place, while over half of companies (53%) are either currently working on plans or aim to work on a plan in the coming months. Companies have focused contingency plans around new geographical markets outside of the UK (32%), diversification into new business products (25%), alternatives to transit of goods through the UK (25%) and sourcing strategies for materials (21%). Those with a contingency plan in place had a greater focus on both increased investment into the UK (18%) and relocation of activity into the UK (15%) when compared to the overall response group, at 9% and 8% respectively.
Brexit and the island of Ireland: When asked about the affect of Brexit on trade between the Republic and Northern Ireland, three out of five (60%) respondents highlighted concern at the potential impact of increased custom and certification procedures on their business. Other issues of importance included the possible risk to stability through undermining of the Good Friday Agreement (44%), the possible risk to all-island supply chain (43%), and increased competition from companies based in Great Britain (40%).