It increasingly looks like a case of ‘batten down the hatches’ for Irish CEOs ahead of Brexit.
The spectre of a ‘no deal’ Brexit has Irish CEOs worried, and 95pc of them believe it would have a negative impact on the economy.
In the latest twist in the torturous road to the UK’s planned exit from the EU in March 2019, UK prime minister Theresa May is battling to keep her Brexit deal alive and is returning to Brussels on Saturday (24 November) for last-minute negotiations with the European Commission.
‘The eurozone provides many advantages, including a market of 350m people, currency stability and common standards for Irish companies looking to export, and we are encouraging Irish exporters to view it as an extension of their home market’
– JULIE SINNAMON
May faces considerable opposition within her own Conservative Party ranks, and the ominous possibility of the UK crashing out of the EU without a deal is increasingly likely.
Deal or no deal, that is the question
Alarmingly, 45pc said delays in the Brexit deal decision-making process were already negatively impacting business operations.
Four in 10 (44pc) said that Brexit had impacted their business over the past 18 months, while 56pc said it had not impacted it. Of those who said it had an impact, the majority cited a negative one.
When asked what impact Brexit would have on their business over the next three years, almost one-third (31pc) reported that they thought they would have lower profits, while 10pc thought they would have higher profits. One-third (34pc) reported a negligible change and a quarter (25pc) said they did not know, or that it was not applicable.
Nine in 10 (93pc) Irish CEOs said they are confident about their companies’ prospects for revenue growth in the next year.
“It’s really interesting that confidence in revenue growth is high among CEOs but, longer-term, we see that they are more cautious, with three in 10 expecting lower profits over the next three years as a result of Brexit,” said Brendan Jennings, CEO of Deloitte Ireland.
“Brexit is a concern and for those businesses who have yet to put preparedness plans in place, they should consider doing so now to ensure they are fully aware of both the challenges and opportunities.”
The challenges ahead
Eight in 10 (84pc) Irish CEOs are planning to expand over the next 12 months. The eurozone (27pc), UK (21pc) and North America (20pc) were considered the top ‘new markets’ to offer opportunity to grow exports. When asked to identify the markets/countries within the eurozone that offer the most potential for their business, respondents listed Germany, France and the Netherlands as the top three.
The top challenges cited by CEOs included availability of skills, retention of talent and competitiveness.
Nine in 10 (92pc) are concerned that macroeconomic issues could impact Ireland’s competitiveness, and the top concerns were Brexit, US tax reform, currency fluctuations and Irish tax.
“The survey results reflect that business leaders have ambitious plans for future growth, with 84pc of CEOs planning to expand their business overseas in the next year, citing the eurozone as one of the key markets with strong market growth potential,” said Enterprise Ireland CEO Julie Sinnamon.
“The eurozone provides many advantages, including a market of 350m people, currency stability and common standards for Irish companies looking to export, and we are encouraging Irish exporters to view it as an extension of their home market.
“As the Brexit negotiations continue, we are supporting Irish companies to consolidate exports in the UK market, while at the same time accelerating our market-diversification strategy, helping more Irish companies to build, scale and expand reach in high-growth markets,” Sinnamon added.