AIB has today released its latest Brexit Sentiment Index for the first quarter of 2018. The index shows that three quarters of Republic of Ireland SMEs and two thirds of those in Northern Ireland say Brexit is having no impact so far, with concerns around future impact and visibility.
AIB’s Brexit Sentiment Index conducted by Ipsos MRBI, is a quarterly survey of more than 700 SMEs in the Republic of Ireland (ROI) and Northern Ireland (NI) 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. Overall, for the first quarter of 2018, the Index registered a score of -41 for ROI and -31 for NI. This means the ROI regresses to the level last seen for third quarter 2017, meaning SME business leaders are slightly more negative in their outlook when it comes to the impact Brexit may have on their businesses than in the fourth quarter. Northern Ireland, while still broadly negative about Brexit, is becoming slightly less so, with a Sentiment Index score of -31, having been at -41 in the fourth quarter 2017.
RoI business sentiment has become more pessimistic about the impact of Brexit on future business, at -53. Sentiment among NI businesses, while still pessimistic, has become less so, at -29 (-41 in the fourth quarter 2017).
The negative sentiment expressed by SMEs in both RoI and NI has also weighed on their plans to invest in and expand their businesses. Prior to the Brexit vote, 42% of SMEs in RoI and 41% in NI had plans to invest in their businesses. “However, one quarter are now reviewing those plans while over one in five have postponed or cancelled them.
The research finds that the sectors which are most negative about Brexit in the Republic of Ireland are Tourism, Manufacturing and Food and Drink.
Commenting on the findings, AIB’s Chief Economist, Oliver Mangan said, "For those businesses that are being impacted, the effects mainly stem from adverse currency movements and lower consumer confidence and uncertainty. The sectors most impacted by Brexit to date are tourism in the Republic, reflecting lower visitor numbers from the UK, and retailing in Northern Ireland, probably due to the higher costs of imports. Both of these are directly related to the weakness of sterling.”