Worrying number of businesses unprepared for Brexit

The economic climate on the island of Ireland is one of extreme uncertainty, as the China-USA trade war increases and Britain lurches ever closer to a no-deal Brexit.

It’s hardly surprising that optimism for the year ahead is sliding away, with the number of businesses expecting an increase in growth over the next 12 months down to 2009 levels, according to a new survey.

InterTradeIreland’s latest all-Island Business Monitor (Q2 2019) does also find that the business environment remains resilient, with 40 per cent of companies across the island reporting growth.

The uncertain outlook was primarily due to Brexit, with 45 per cent of businesses overall, and almost 60 per cent of manufacturing firms, record Brexit as the key issue they face.

Despite the fear of Brexit over a number of years, only 11 per cent of respondents say they have made any preparations in the event of a ‘no-deal’ Brexit.

In terms of getting ready for a no-deal outcome, bigger firms with more capacity are better prepared with 35 per cent saying they have made preparations. At the other extreme, only one in ten micro businesses have made any preparations.

Surprisingly, 82 per cent of cross-border traders, who are most exposed in the event of a no-deal, have not prepared for that outcome. Indeed, only 14 per cent of businesses trading cross-border have examined the impact of customs, while just 12 per cent have looked at the effect of tariffs. Aidan Gough, InterTradeIreland’s Designated Officer and Director of Strategy and Policy, said: “The disparity between businesses recognising Brexit as the key issue facing them and the number actually preparing for it remains a worry. While we appreciate the uncertainty facing businesses and the constant challenge to win new and service existing orders, we nevertheless implore firms, particularly those that trade across the border, to make themselves aware of the issues that Brexit could pose for their operations and to explore mitigating options.

“There are a range of supports out there for businesses, including InterTradeIreland’s Brexit online learning resources and funding of up to £4,500/€5,000 to help with expert advice.

“Don’t leave it until the last minute. There are lots of small steps that businesses can begin to take now to prepare, whatever the outcome. It doesn’t have to be onerous. Planning is never wasted and is much preferable to panic if left undone,” he added.

“While Brexit remains the overwhelming issue facing businesses, particularly small businesses, there is concern that failure to remove the uncertainty is exposing businesses to more problems in the longer term. As the pace of technological change advances at a rate that leads many commentators to refer to a new industrial revolution (Industry 4.0), the latest Business Monitor finds only around a fifth of businesses on the island have heard of the fourth industrial revolution, with even less being aware of its possible implications which for many industries and businesses could be profound.”

InterTradeIreland’s quarterly Business Monitor survey, which began in 2008, is the largest and most comprehensive business survey on the island and is based on the views of more than 750 business managers across Northern Ireland and Ireland.