Increase in Offaly companies putting Brexit plans in place

Justin Kelly

Reporter:

Justin Kelly

Email:

news@offalyexpress.ie

Increase in Offaly companies putting Brexit plans in place

Increase in Offaly companies putting Brexit plans in place

In Offaly, there has been a surge in businesses getting Brexit-ready in the last quarter in response to the threat of a no-deal Brexit.

The number of businesses across different sectors that are actively preparing for the threat that Brexit poses continues to increase.

Richard Dunne, AIB Brexit advisor for Kildare, Laois and Offaly commented: “We continue to keep in close consultation with our most heavily impacted Brexit customers particularly in the manufacturing and food sectors in the region. They are continuing to implement strategies such as stockpiling in the UK, diversifying to alternative markets and utilising shipping options as opposed to using the UK as a land bridge which are prudent methods of offsetting risk.”

“In the logistics and transport sector, in particular, we have been working with businesses to provide additional working capital facilities in advance of a potential no deal Brexit."

"Brexit planning has come into sharp focus for this sector as cross border trade means customer based in the UK & NI are now actively looking for evidence of the appropriate licenses and certification to carry on transport activities in the UK in a no deal situation, documents which were not previously required.”

“Importantly, we are seeing an uplift in the number of businesses coming to us to assess the potential of indirect exposures that they may not have previously contemplated. For example, in the retail sector, customers are carrying out due diligence to establish the supply chain of their wholesalers to ensure there will be no delay on importing products in the event of a no deal Brexit."

"It is important that all businesses carry out a Brexit review to establish if they need to come and talk to AIB about putting facilities in place, whether it is to hedge against currency exposure, working capital facilities or the SBCI Brexit loan facility. We would like to reiterate that we are open to discussing all potential options with our Brexit impacted customers, to review their requirements and help them navigate this uncertain period.”

The AIB Brexit Sentiment Index for Q1 2019 reveals that two thirds (64%) of SMEs in the Republic of Ireland (ROI) have begun formally planning for or investigating the implications of Brexit – up 16% on the last survey.  56% of SMEs in Northern Ireland (NI) have yet to start their Brexit planning or inquiries. Concerns over Brexit continue to impact investment plans, with 53% of ROI SMEs and 66% of NI SMEs that planned to invest in their business now reviewing, postponing or cancelling their plans.

The Brexit Sentiment Index baseline is zero, with a potential range from +100 to -100. For Q1 2019, the Index registered a score of -52 in the ROI, from -41 in Q4 2018, and -31 in Q1 2018. Sentiment in Northern Ireland fell to –38 for Q1 2019 from -31 in Q4 2018. The rise in negativity in ROI is driven by the feeling among SMEs that Brexit is starting to impact business now (46% of them agree compared to 25% in September 2018), with a rising number concerned about the impact Brexit could have on their business in the future (76%). 

In the Republic of Ireland, the index is at its lowest point for most sectors, with the food & drink sector the most negative, registering a new low (-56), closely followed by the tourism (-55) and retail (-53) sectors.  The percentage of businesses reporting a negative impact on sales in the ROI is now 23%, double the level measured in September 2017 (12%).

AIB’s Brexit Sentiment Index conducted by Ipsos MRBI is a quarterly survey of more than 700 SMEs in the Republic of Ireland and Northern Ireland that assesses the attitudes of SME business leaders on Brexit and the impact on their businesses.