Ibec have today warned that a decisive and immediate national response to the Brexit "currency shock" is currently needed.
The group has warned that the brexit has left many key export businesses reeling with jobs already under threat.
The warning from the country’s main business organisation comes as a new survey highlights the intense currency strain on exporters following the UK vote. The survey found that the negative exchange implications of the UK vote is by far the biggest concern of business.
Almost half (45%) saw this as the main threat. Ibec claim exporters are operating with a major competitive handicap in the UK market while domestic firms are facing the prospect of cheaper UK imports grabbing market share.
Separate economic analysis from Ibec also found that the impact on UK focused export sectors, such as agri-food, will be particularly severe. The analysis of the historical exchange rate and agri-food export relationship shows that a 1% weakness in sterling results in a 0.7% drop in Irish exports to the UK.
If sterling was to weaken further towards the £0.90 mark, this would translate to losses of over €700 million in food exports and about 7,500 Irish jobs in that sector alone.
Ibec Director of Policy Fergal O'Brien said, "This is now a full blown currency crisis. For exporters, the speed of sterling’s decline is on a par with the 1992 currency crisis. Irish exporters to the UK are already 15% less competitive and things could get much worse. The problem demands urgent government attention."
Source: www.businessworld.ie
