Ireland needs to get its infrastructure in order to compete post-Brexit.
The business outlook for Ireland in the wake of Brexit is not good, but if Ireland takes the right steps to fix infrastructure deficiencies, it could weather the storm with aplomb.
That’s the view of Irish CEOs, 81pc of whom are concerned about Ireland’s overall competitiveness post-Brexit, according to a new PwC study.
‘Of those survey participants who have UK operations, over a quarter are either planning to relocate some or all of their operations to Ireland, or this is under consideration’
– DAVID MCGEE
An overwhelming majority (87pc) of CEOs are concerned about the flow of goods to and from Ireland, while 75pc are worried about exchange rate volatility.
Crucially, almost a third (30pc) expect their level of trade with the UK to decline as a result of Brexit.
Less than two-thirds (61pc) of Irish CEOs are confident about their organisation’s prospects for revenue growth over the next three years, down from 85pc prior to the UK’s decision to leave the EU in June 2016.
“Customs and tariffs are a key concern for Irish business leaders,” said John O’Loughlin, global trade and customs leader at PwC.
“If World Trade Organisation rules govern EU-UK trade relations post-March 2019, competitiveness and costs would likely be impacted as companies compete on a new global playing field.
“For example, tariffs as high as 55pc for imports into the UK of cheddar cheese may apply and would have serious implications for the Irish agri-food sector.”
Brexit’s FDI bonanza
However, Brexit could turn out to be a goldmine in another sense, according to 41pc of Irish CEOs.
Some even see Brexit as being the greatest opportunity for increased foreign direct investment (FDI) based on Ireland being the only English-speaking member state in the EU.
Other opportunities include Ireland’s EU passporting benefits (15pc) and the chance for Ireland to play a more prominent role in the EU (8pc).
However, the CEOs did highlight certain areas for improvement to further attract organisations to locate to Ireland post-Brexit; for example, the high personal tax burden (29pc), accommodation deficits (25pc), lack of available talent (17pc), poor infrastructure (15pc) and regulation (14pc).
“Of those survey participants who have UK operations, over a quarter (27pc) are either planning to relocate some or all of their operations to Ireland, or this is under consideration,” said David McGee, PwC Ireland Brexit partner.
“It is important that Ireland maximises the opportunities from Brexit. Ireland has a pro-business environment, a highly skilled and flexible workforce, and will be the only English-speaking EU member state post-Brexit with the same common-law jurisdiction as the UK.
“Ireland is therefore recognised by many business leaders as a great location to do business. However, we will need to do all we can to secure any potential business that may come our way.”