More than 60% of Northern Ireland and Republic of Ireland small business owners believe Brexit will negatively affect their company’s future.
According to new data from Allied Irish Bank (AIB), 58% of Northern Ireland (NI) small and medium-sized enterprises (SMEs) have had investment plans postponed or cancelled, while 22% of Republic of Ireland (ROI) businesses surveyed said the same.
Due to uncertainty, 11% of NI businesses have postponed bank borrowing, along with 7% of ROI SMEs.
Fears of a hard border have increased to 24% among NI business owners – up from 15% in the previous quarter.
Some 63% of NI SMEs have not started planning for Brexit, with only 3% saying they have a formal plan, while 5% of ROI businesses said they had formulated plans for post-Brexit.
Tourism, manufacturing and retail sectors are reportedly the most pessimistic about life after the UK leaves the EU.
The AIB Sentiment Index for the third quarter of 2018 reveals 62% of NI SMEs believe Brexit will have a negative impact on their business. ROI business owners are slightly more pessimistic, on 63%.
Some 44% of ROI participants also said Brexit was resulting in a negative outlook for their sector.
The Sentiment Index showed that ROI had become slightly more negative in outlook when it came to the impact the changes may have on their business than in the previous quarter of 2018.
The Index shows SMEs operating in retail (-40), manufacturing (-43) and tourism (-49) were the most pessimistic in terms of sentiment.
Speaking about the latest findings, Brian Gillan, head of business and corporate banking at First Trust Bank, said local NI businesses could see long-term impact.
“The main source of negativity for NI SMEs is still the lack of visibility as to what Brexit means for them, standing at 85%,” he said.
“There is little doubt that the lack of certainty as to what is going to happen is impacting decisions here.
“The long-term impact of these delayed decisions is the most worrying aspect of this situation as they could negatively impact the competitiveness of local businesses, especially those operating in export markets.”
AIB chief economist Oliver Mangan said the lack of any major developments in negotiations was reflected in the new data.
“There was also much speculation over the period about an increasing probability of a no-deal, hard Brexit given the lack of progress in the negotiations and the deep political divisions in the UK, which will make it difficult for an exit deal to get through Parliament,” he said.
According to AIB, NI SMEs are more likely to feel the negative impacts of Brexit, now at 37% compared to 25% in ROI.
AIB’s Brexit Sentiment Index conducted by Ipsos MRBI is a quarterly survey of more than 700 SMEs in the Republic of Ireland and Northern Ireland that assesses the attitudes of SME business leaders on Brexit.