Low enthusiasm for Brexit dims as firms wait for information

Disapproval of Brexit and preparations around it seem to be hardening
Disapproval of Brexit and preparations around it seem to be hardening

Northern Ireland business sentiment towards Brexit has dropped for the first time in a year after signs that firms were coming round to the idea have been reversed.

More than two thirds of thospolled for the AIB Brexit Sentiment Index for Q2 2018 said the lack on knowledge about what was actually going on in the process was a significant factor.

While almost 50% of Northern Ireland businesses have postponed or cancelled investment plans over Brexit, the majority in both economies do not expect a hard border.

The latest findings from the index have registered a score of -37 in both Northern Ireland (NI) and the Republic of Ireland (ROI) compared to -31 for and -41 respectively in the first quarter of the year.

While the index has been fastened firmly in negative territory since the first wave of research was carried out 12 months ago, NI business sentiment had been increasing steadily: -38 in Q3 2017, -36 in Q4 2017 and -31 in Q1 2018.

The poll also reveals that 61% of SMEs in Northern Ireland believe Brexit will have a negative impact on future business compared 50% a year ago.

AIB’s Brexit Sentiment Index conducted by Ipsos MRBI, is a quarterly survey of more than 700 SMEs in NI and ROI that assesses the attitudes of SME business leaders on Brexit and its impact on their businesses. The Brexit Sentiment Index baseline is zero, with a potential range from +100 to -100.

In terms of border expectations, the majority of businesses in NI (85%) and ROI (68%) envisage a border closer to what we currently have.

Almost a third of ROI SMEs however envisage a hard border scenario compared to 15% locally.

“While we have seen incremental increases, the passage of time since we undertook the first wave of the AIB Brexit Sentiment Index has done little to change the views of NI businesses,” said Brian Gillan, head of business and corporate banking at First Trust.

“There is little doubt that the lack of certainty as to what is going to happen down the line, good or bad, is impacting decisions here – with now one in two investment or expansion plans being postponed or cancelled as a direct result of Brexit.”

While the number of firms with a formal Brexit plan in place has risen slightly, the percentages are however still in single figures with the Index reporting that 5% (2% in Q1, 2018) of NI businesses have a plan in place, with 6% in ROI (4% in Q1, 2018) doing likewise.

This seems to be influenced by company size with the number of smaller companies starting their investigations much lower.