closer to hard border roi ni smes pessimistic about … · 2 days ago · roi 50% 18% ni positiv...

With Brexit potentially less than two years away, sentiment

among many SMEs in both the Republic of Ireland and

Northern Ireland points to a degree of uncertainty and

negativity as they prepare themselves for the future,

according to AIB’s inaugural Brexit Sentiment Index.

The Index reflects and measures the outlook of Irish SMEs towards Brexit,

summarised as a single number, with a potential range from +100 to -100.

AIB's Brexit Sentiment Index tracks SME business sentiment across the island of Ireland during Brexit negotiations.

-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI

EXPECTATIONS REGARDING BORDER

MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%

CLOSER TO WHAT WE HAVE NOW

ROI NI

AWARENESS OF TARIFFS

MEZZANINE FINANCING

YES

24%

11%

15%

16%

YES, BUT NEED MORE INFORMATION

ROI NI

MEZZANINE FINANCING

65%69%NO

% INCIDENCE OF EXPORTING / IMPORTING

Exporting

56%NI

22%ROI

AWARENESS OF TARIFFS THAT MIGHT IMPACT GOODS / SERVICES

ROI

OPPORTUNITIES FROM BREXIT

Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI

STERLING >> EURO EXCHANGE RATE

ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI

IMPACT ON BUSINESS NOW

26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive

IMPACT ON FUTURE BUSINESS

54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive

BREXIT OPPORTUNITIES

Source: Ipsos MRBI

CURRENT IMPACT ON COST OF SALES

EXPANSION PLANS ON HOLD / POSTPONED / REVIEWED

28%ROI Yes 20%NI

Yes

ROI NI

Higher Lower Higher1%10% 15% 56%Lower

18%ROI 31%NI

INTERNATIONAL TRADE ACTIVITY

ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%

51% Import from UK 52% Import from ROI/EU

Export to ROI/EU

AIB BREXIT SENTIMENT INDEX* (Q3 2017)

-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI


MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%


ROI NI


MEZZANINE FINANCING

YES

24%

11%

15%

16%


ROI NI

MEZZANINE FINANCING

65%69%NO


Exporting

56%NI

22%ROI


ROI


Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI


ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI


26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive


54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive


Source: Ipsos MRBI



28%ROI Yes 20%NI

Yes

ROI NI


18%ROI 31%NI


ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%


Export to ROI/EU


-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI


MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%


ROI NI


MEZZANINE FINANCING

YES

24%

11%

15%

16%


ROI NI

MEZZANINE FINANCING

65%69%NO


Exporting

56%NI

22%ROI


ROI


Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI


ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI


26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive


54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive


Source: Ipsos MRBI



28%ROI Yes 20%NI

Yes

ROI NI


18%ROI 31%NI


ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%


Export to ROI/EU

AIB BREXIT SENTIMENT INDEX* (Q3 2017)SMEs PESSIMISTIC ABOUT BREXIT

*The Index reflects and measures the sentiment of Irish SMEs towards Brexit, summarised as a single number, with a potential range from +100 to -100. It takes the difference between the positive and negative responses across four key measures: Impact on business now, Impact on future business (next 5 years), Level of visibility and, finally, the Wider economic impact of Brexit.

fxcentre.aib.ie/brexit

BREXIT SENTIMENT INDEX

1 | November 2017 #backedbyAIB

-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI


MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%


ROI NI


MEZZANINE FINANCING

YES

24%

11%

15%

16%


ROI NI

MEZZANINE FINANCING

65%69%NO


Exporting

56%NI

22%ROI


ROI


Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI


ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI


26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive


54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive


Source: Ipsos MRBI



28%ROI Yes 20%NI

Yes

ROI NI


18%ROI 31%NI


ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%


Export to ROI/EU


Due to the prevailing un-

certainty surrounding Brexit

on the economies of both the

Republic of Ireland and Northern

Ireland, the first wave of the AIB

research found that the overall

sentiment towards Brexit is

overwhelmingly negative. Of the

two jurisdictions, the negative

sentiment expressed by SMEs in

the Republic of Ireland was slightly ahead (-41)

of their counterparts in Northern Ireland (-38).

“The general sense among our SME

customers is that Brexit will have a negative

impact on both their business and the wider

economy and this is backed up by AIB’s Brexit

Sentiment Index,” says Catherine Moroney,

Head of Business Banking, AIB.

“While the impact is already being felt,

particularly by those invoicing in Sterling,

most businesses in the Republic of Ireland

believe that the greatest challenges lie

ahead. However, in Northern Ireland

the immediate impact appears greater, with

fewer concerned about the longer-term

impact,” she says.

When broken down amongst the four key

Index measures, SMEs in Northern Ireland

are already feeling Brexit’s impact, with as

many as 41% admitting that it’s having a

negative impact compared to 26% in the

Republic of Ireland.

As SMEs in Northern Ireland

are more negatively impacted

by Sterling’s recent fluctuations,

their challenges are a lot more

immediate and tangible. Indeed

currency fluctuations over the

last 12 months combined with

increased costs, a decrease in

consumer confidence and general

uncertainty were cited by 27% of

respondents as the main reasons

why Brexit is already having a

negative impact on their businesses.

“Currency fluctuations continue

to be a key and immediate concern

for SMEs that export or import.

Increased volatility in Sterling is

impacting SMEs across the island

of Ireland,” says Tom Hall, Head of

Treasury Sales, AIB.

“This research tells us that Republic of Ireland

based exporters and Northern Ireland based

importers have seen their margins contract

materially as the value of Sterling has depreciated.

What hasn’t been as widely reported, and comes

out strongly from our research, is the very large

cohort of ROI SMEs that, as importers, have

benefited significantly from the strengthening

Euro. Whether these gains can offset the rising

costs from the increased friction in trade with the

UK remains to be seen.”

“Our guidance to SMEs remains consistent.

Businesses should analyse their supply chain

looking for opportunities to lessen currency

exposures where possible. We encourage SMEs

to consider using forward FX contracts to lock in

exchange rates for some of their payables and

receivables, thereby reducing potential shocks to

cash flow. Most importantly, we want to support

our customers. If you need help, please talk to us.”

SMEs in Northern Ireland have also seen

a reduction in their sales over the last 12

months with as many as 21% of

firms reporting a decline. Sectors

most exposed are Retail and

Manufacturing, with 24% and

26% respectively, reporting a dip

in their sales. By comparison,

just 12% of SMEs operating in the

Republic of Ireland have reported

a decline in sales, with no impact

for most firms (82%).

Catherine Moroney, Head of Business Banking, AIB

Tom Hall, Head of Customer Treasury Services, AIB.




VICKI O’TOOLE, J.J. O’TOOLE, LIMERICKAs the leading supplier of bespoke

packaging in Ireland, Limerick-based

J.J. O’Toole is watching the unfolding

Brexit negotiations with keen interest.

With 15% of its turnover exported and

approximately 3% of this going to Northern Ireland

and the UK, where it has developed a growing

blue-chip client base, the company’s managing

director Vicki O’Toole says that planning for Brexit

can be difficult, given the prevailing uncertainty.

“It is very difficult for us to mitigate against

the risks of Brexit when it seems that no one

really knows what those risks will be or when

they will happen. When we don’t know what

the challenges are, it’s hard to plan ahead.

So, with all the uncertainties and currency

volatilities, the stance we are taking is not

to panic but ensure that we are keeping up

to speed with latest news and analysis.”

Depending on the outcome of the ongoing

Brexit negotiations, the company may

set up a subsidiary in the UK to manage

its client-base there while other export

markets are also being explored.

"Whilst this may provide some regulatory

cover, it will not cover the potential risks of

currency volatility. In this regard, we have

had recent experience of quoting a major UK

customer in US dollars, the preferred currency

of many of our Asian partners. However, with

all the unpredictability at the moment, we are

now also looking at the possibility of delving

into other international markets,” says Vicki.

While the possible introduction of tariffs

is a concern for the company, she adds

that it’s important not to underestimate the

relationships it has built up with clients.

“I do believe that we should not forget the

importance of our relationships with our existing

and future clientele in the UK. We are the

preferred packaging partners to clients in the UK,

not just because we are competitive. Business is

forged on good relationships and trust between

companies as well as quality product and excellent

service levels. Therefore, we must continue to

provide a superior offering to our clients to ensure

the positives outweigh the negatives,” she says. ■

CUSTOMER VIEW

Not surprisingly, a weaker Sterling over the last

12 months is also impacting on the cost of sales

for firms located in both jurisdictions, although

the impact is being more widely felt in Northern

Ireland where 56% of SMEs have seen cost of

sales increase compared to just 10% in the


The research also shows that SMEs in the

Republic of Ireland are slightly more pessimistic

than their counterparts across the Border

when it comes to the impact of Brexit on their

future. Some 54% of SMEs in the Republic of

Ireland believe that it will have a negative

impact compared to 50% in

Northern Ireland.

“This piece of research

commissioned by AIB shows

the high level of uncertainty

of businesses in the Island

of Ireland. As the Brexit

negotiations evolve, and as the

future trade regime between

EU and UK, and the transition

become clearer, businesses will have to plan

in order to limit inevitable negative impacts.

Even the best Brexit agreement will result in

more controls, hence frictions, hence costs,

for both sides,” says Pascal Lamy, President

Emeritus of the Jacques Delors Institute and

former Director-General of the World Trade

Organisation (WTO).

Research also reveals that most SMEs believe

that, post-Brexit, any Border that might be

implemented will be closer to the one that is

currently in operation. Only 37% of SMEs in

the Republic of Ireland and 24% in Northern

Ireland believe there will be a “hard border.”

As the finer details of the UK’s exit from

the EU have yet to be agreed, the AIB Brexit

Sentiment Index shows that this is also having

an impact on SME’s ability to plan for their

future, with some 57% of SMEs in the Republic

of Ireland and 67% in Northern

Ireland admitting that visibility

was “very limited” while 31%

and 20% admitted it was limited.

A lack of visibility can also

influence a company’s ability

to plan for the future and the

research shows that 18% of

SMEs in the Republic of Ireland

and 31% in Northern Ireland

have either reviewed, cancelled or postponed

future expansion and investment plans.

This lack of visibility is also impacting on the

SMEs' ability to develop a strategy to deal with

any tariffs that might arise post-Brexit. Some

69% of SMEs in the Republic of Ireland and

-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI


MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%


ROI NI


MEZZANINE FINANCING

YES

24%

11%

15%

16%


ROI NI

MEZZANINE FINANCING

65%69%NO


Exporting

56%NI

22%ROI


ROI


Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI


ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI


26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive


54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive


Source: Ipsos MRBI



28%ROI Yes 20%NI

Yes

ROI NI


18%ROI 31%NI


ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%


Export to ROI/EU


Pascal Lamy, President Emeritus of the Jacques Delors Institute

and former DG of the WTO.

-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI


MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%


ROI NI


MEZZANINE FINANCING

YES

24%

11%

15%

16%


ROI NI

MEZZANINE FINANCING

65%69%NO


Exporting

56%NI

22%ROI


ROI


Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI


ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI


26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive


54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive


Source: Ipsos MRBI



28%ROI Yes 20%NI

Yes

ROI NI


18%ROI 31%NI


ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%


Export to ROI/EU


CUSTOMER VIEW PETER McALLISTERMCALLISTER GROUP, NEWRYWith nearly 100 staff and a client base

in Northern Ireland, England and the Republic

of Ireland, the 46-year old Newry-

headquartered McAllister Group has carved

out an important niche as a leading supplier

of trenchless technology services and

environmental solutions. The family-owned

company boasts a blue-chip client list which

includes leading utility and transport companies

like NI Water, Irish Water, Thames Water,

Southern Water, Translink, Transport NI,

Network Rail and London Underground.

According to managing director, Peter

McAllister, the 2016 Brexit vote had an almost

immediate impact on the business as Sterling

started to decline against the Euro.

“We source a lot of our equipment within the

EU, particularly Germany, and once Sterling

started to weaken, it had an immediate impact

as buying equipment became nearly 20% more

expensive. We had to look at our own costs and

try and build them into our pricing. So, you could

say that we are dealing with Brexit on a day-to-

day basis.” he says.

“But it has been business as usual for us, even

though the currency fluctuations haven’t been

helpful. You can’t stand still in this business

and Brexit hasn’t stopped our work plans and

nor has it stopped our growth plans. We will

continue to work in the UK, particularly in the

Greater London area as this has become an

important growth market. But we can’t let Brexit

hold us back,” he adds.

He points out that some 45% of the company’s

turnover is generated in the important UK

market. Another 40% is derived in Northern

Ireland while the remaining 15% comes from the


“We will continue to keep an eye on the market

in the Republic of Ireland where we already have

clients and it’s possible that we might set up a

company there in the future." he says.

“But we also have experience in other markets

and for a while we were in the Middle East

but we took a decision to focus on our London

operation which was growing. But we are not

adverse at looking at other markets in the future.

Our services are movable services and our

business is movable business.” says Peter. ■




-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI


MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%


ROI NI


MEZZANINE FINANCING

YES

24%

11%

15%

16%


ROI NI

MEZZANINE FINANCING

65%69%NO


Exporting

56%NI

22%ROI


ROI


Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI


ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI


26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive


54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive


Source: Ipsos MRBI



28%ROI Yes 20%NI

Yes

ROI NI


18%ROI 31%NI


ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%


Export to ROI/EU


65% in Northern Ireland have no awareness of

tariffs and the implications they might have on

their businesses. However, even for those who

had some awareness of tariffs, many admitted

it was limited, with 15% of SMEs in the Republic

of Ireland and 24% in Northern Ireland saying

they needed more information.

When it comes to the final of the four inputs

that make up the Index – Brexit’s wider economic

impact - SMEs in the Republic of Ireland are

also a lot more pessimistic, with 71% of those

surveyed admitting that it will have a negative

economic impact, compared to 55% of SMEs

in Northern Ireland. Every sector within both

economies will be directly impacted by Brexit,

according to the research.

Some 34% of SMEs in the Tourism &

Hospitality sector say Brexit is already

negatively impacting their businesses as

the number of UK tourists visiting Ireland

continues to decline. A further 67% say that

it will continue to have a negative impact in

the future while 74% say it will have wider

economic implications over the longer term.

Overall, the Tourism & Hospitality sector

in the Republic of Ireland registered -51

on the Brexit Sentiment Index, making it the

most downbeat of all the sectors, including Retail

(-41), Manufacturing (-40), Food & Drink (-35),

Professional Services (-31), Technology, Media &

Telecoms (-38) and Transport & Logistics (-41).

By comparison, Northern Ireland’s Tourism

& Hospitality sector registered -31 on the

Index after a greater degree of optimism was

expressed as occupancy rates remain steady

and the weakness in Sterling is attracting more

visitors. However, the Retail sector registered

-48 on the Index with many retailers already

feeling challenged by Sterling’s volatility.

While the overall sentiment registered

is largely negative given the uncertainty

and disruption that will be caused to exporters

and importers, it shows that some SMEs are

also positive about the opportunities that may

arise. This is stronger in the Republic of Ireland

where over a quarter of SMEs see opportunities

arising from Brexit. This is highest among

businesses in Dublin.

In Northern Ireland, meanwhile, 20% of SMEs

see opportunities arising out of Brexit with

Tourism, in particular, standing out.

With uncertainty and adverse currency

fluctuations surfacing as the dominant themes

throughout the Brexit Sentiment Index,

it is imperative that companies start to plan

their future.

“Planning is made easier in times of certainty.

However, in times of uncertainty it is critical.

AIB is encouraging businesses to seek good

advice and plan for the worst-case scenario.

AIB has 21 Brexit Advisors nationwide

who are there to support our customers in

understanding how Brexit may impact their

business. They are available to meet with

customers to discuss potential implications and

examine the ways in which AIB can provide

support in planning for Brexit. Armed with

a plan, AIB can discuss how we can support

their financial needs whether that is increased

working capital, funding for new capital

expenditure or development of new routes

to market. Whatever the final outcome, the

business will be better positioned for the future,”

Catherine concludes. ■

-10

-20

-30

-40

-50

September 2017

June 2016

£1k =

€1,267£1k =

€1,116

Source: Ipsos MRBI


MEZZANINE FINANCING

HARD BORDER

76%

24%

63%

37%


ROI NI


MEZZANINE FINANCING

YES

24%

11%

15%

16%


ROI NI

MEZZANINE FINANCING

65%69%NO


Exporting

56%NI

22%ROI


ROI


Yes20%

No80%

NI

Yes28%No

72%

ROI

Yes11%

No65%

NI

Yes, but need

more information

24%

Yes16%

Yes, but need

more information

15%

No69%

Source: Ipsos MRBI

Source: Ipsos MRBI

Source: Ipsos MRBI

Source:AIB

IMPACT OF BREXIT

Source: Ipsos MRBI


ROI UK/NI

Importing Exporting

30%

OTHER EU

33%NI

NI OTHER EU

Importing

+100-100

Most Optimistic /

Positive

Most Pessimistic /

Negative

0Neutral-41

(ROI)

-38(NI)

Source: Ipsos MRBI


26%

8%

ROI

41%

9%

NI

Positive

Negative Negative

Positive


54%

11%

ROI

50%

18%

NI

Positive

Negative Negative

Positive


Source: Ipsos MRBI



28%ROI Yes 20%NI

Yes

ROI NI


18%ROI 31%NI


ROI SMEs

Source: Ipsos MRBI

20% Export to UK

NI SMEs

36%


Export to ROI/EU


As the Brexit Sentiment Index

shows, SMEs operating in

Northern Ireland have already

begun to feel the impact of

Brexit on their businesses

with 41% of SMEs reporting

that it has had a negative

impact to date.

Sterling’s weakness against

the Euro, increased costs and a dip in consumer

confidence have all conspired to make the

business landscape a lot more challenging.

“The negative impact from Brexit is already being

acutely felt by SMEs in Northern Ireland, particularly

among retailers and larger businesses, as cost inflation

takes hold and squeezes the consumer. Sales are

down with 21% of Northern Ireland SMEs reporting

lower revenue as a result of Brexit. Investment and

expansion plans have also been hampered, with 1

in 3 NI SMEs having reviewed,

postponed or stopped their

existing plans,” says Brian Gillan,

Head of Business Banking,

First Trust Bank.

He points out that the sentiment expressed by the

Tourism sector in Northern Ireland is noteworthy.

“Not unexpectedly, the optimism and buoyancy

of the Tourism & Hospitality sector stands out.

Continued growth in occupancy, room rate and

REVPAR has been underpinned with a weaker GBP

FX rate which is attracting more international visitors

as well as from the Republic of Ireland,” he says.

“Perhaps more of a surprise in the Index is

the stark contrast of sentiment between Northern

Ireland and the Republic of Ireland, with the impact

of higher input cost inflation in NI far outweighing the

potential export growth opportunity. A higher number

of larger NI businesses, with 20 or more employees,

are exporting with 36% of NI businesses considering

themselves exporters which was surprisingly higher

than ROI's 22%,” says Brian.

Despite the existing and immediate impacts now

evident in NI, a very small number of businesses have a

plan in place to address the potential impacts of Brexit.

It's now more important than ever that NI businesses

engage to develop plans which will not only help

them to absorb and mitigate Brexit impacts but also

identify and avail of any potential opportunities. ■

THE NORTHERN IRELAND PERSPECTIVE

Brian Gillan, Head of Business Banking, First Trust Bank.

The AIB Brexit Sentiment Index is based on detailed telephone interviews conducted by Ipsos MRBI from its call centres in Dublin and Belfast amongst 500 SMEs in the Republic of Ireland and 200 in Northern Ireland, operating in a number of key defined sectors.


fxcentre.aib.ie/brexit 4 | November 2017 #backedbyAIB Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland

The AIB Brexit Sentiment Index is based on detailed telephone interviews conducted by Ipsos MRBI from its call centres in Dublin and Belfast amongst 500 SMEs in the Republic of Ireland and 200 in Northern Ireland, operating in a number of key defined sectors.

HOW CAN WE HELP?

AIB, Republic of Ireland Visit your local AIB branch or 1890 47 88 33

(8am - 9pm weekdays, 9am - 6pm Saturdays)

First Trust, Northern Ireland Brian Gillan, Head of Business Banking [email protected] 028 904 79206

closer to hard border roi ni smes pessimistic about … · 2 days ago · roi 50% 18% ni positiv...

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