Only 1 in 8 Irish businesses believe a Brexit deal will be struck between the EU and Britain by the October deadline. Of the 400 Irish businesses surveyed as part of the BDO quarterly Optimism Index, 88% believed a final agreement on Britain’s withdrawal from the EU will not be reached by the October deadline.
The news was revealed as part of BDO’s quarterly Optimism Index which monitors business sentiment among Irish companies. The survey found that exporters reported a fall in business activity in the third quarter of this year. Despite these beliefs, Irish businesses are doing well.
According to the latest BDO Optimism Index, Optimism levels are the highest they have been since this survey began at 70.3; this is a 37% improvement in optimism levels since 2011. Companies outside Dublin (70.69) are more optimistic than those based in the capital (69.49).
Brexit is having a real impact on Irish business, as the number of indigenous companies reporting higher levels of business activity rose above exporters for the first time since 2012. However, despite Brexit uncertainty exporters are notably more optimistic, with 60% saying they expect business levels to be better in third quarter, up from only 41% saying the same this time last year.
In contrast, less than half of non-exporting companies expect their business to perform better next year with 46% predicting this outcome.
The number of companies who recorded an increase in operational profit in second quarter 2018 compared to the same period last year has increased to 42%, an 11% increase from last year. This is a 34% increase since 2011.
Irish businesses also reported a significantly higher amount of business activity this year with 48% experiencing an increase in business activity this year in comparison with the same quarter last year at 39%.
Employment levels have remained stable, with the majority of firms maintaining the same employment levels as last year. Employment in micro firms has improved slightly and is consistent for large companies. However, medium sized companies stated that their employment levels have decreased since the same period last year. Employment levels continue to be higher in the capital than in the rest of Ireland.
Commenting on the index, Partner of the BDO Customs and International Trade Services department, Carol Lynch said, "The majority of Irish businesses do not believe the EU will reach a Brexit deal on time, this is understandable given the amount of work that is still to be done on Northern Ireland, Border checkpoints and the future trade agreement, , along with other items. It’s also prescient taking into account Donald Tusk’s comments from Salzburg requiring clear progress on the backstop in order to continue talks, mean we are left with a short window of less than 20 days to secure results."
She added, "We are now close to the wire with a high risk of a no deal Brexit happening by default. Therefore it’s become vital that businesses continue to prepare for Brexit or immediately start if they have not done so.."
Source: www.businessworld.ie
