65% of Irish Businesses Have Not Reviewed Their Supply Chains to Gauge Brexit Impact
65% of Irish businesses have not reviewed their supply chain to identify current business relationships that might be negatively impacted by Brexit. This was the finding of a business sentiment survey of 350 Irish Businesses carried out by one of Ireland’s leading accountancy firms, BDO.
Spokesperson Michael Costello, Managing Partner, commented: “Brexit will hit Ireland’s unprepared supply chains hard. Although there is no clarity as to what the full costs of Brexit will be going forward, the one certainty is that once Britain leaves the EU there will be a requirement for exporters and importers to make declarations and pay customs duties. This will involve costs for customs compliance and additional costs associated with delays at borders.
“Examining the supply chain is vital to reducing the potential negative impact of Brexit on a businesses and alleviating costs associated. It is the first move a business should make when examining the potential Brexit impact and the first step to attaining a Brexit competitive advantage. We would strongly urge all Irish Businesses to take practical steps to examine their supply chain as soon as possible.”
The survey also found that businesses believed that 38% of suppliers were prepared for the impact of Brexit on business, with only 24% citing themselves as Brexit-ready, and 8% saying they do not believe they are prepared at all.
Commenting on this BDO’s managing partner, Michael Costello said: “These results illustrate the high level of uncertainty Irish firms have about post-Brexit Ireland. Businesses need to ensure they are adequately prepared for the many changes that will inevitably take place in the coming months and years. There are many ways businesses can be pro-active in ensuring that they are informed, prepared and ready for the transitions that will take place. We advise businesses to take the practical steps to prepare for Brexit as the deadline draws closer.”
The report also highlights there was a strong finish to 2017 with 51% of businesses recording increases in current business activity. 30% of businesses advise their activity levels had stayed the same and 18% reported lower levels.
The survey reports operational profit levels are in line with last year at 23% . However projected business activity continues to be muted and is noticeably weaker at -5% than it was for 2014, 2015 and 2016.
Other findings from the survey show that employment levels have remained relatively stable, with 74% of businesses saying their employment levels are the same as the last quarter. 18% indicate they have seen an increase on employment levels, and just 7% of businesses reported that their employment levels are down.
BDO’s ‘Optimism Index’ has been tracking business sentiment on a quarterly basis since 2011. Optimism is up from this point last year, rising from 66.7 in 2016 to 67.9 in 2017. Medium and large sized businesses are the most optimistic at 67.73 and 73.83 respectively. Overall the survey found that companies remain optimistic.
“At first glance, it appears business growth is moving in the right direction and figures for this quarter against the same period last year remain strong. Businesses need to focus more on areas such as Brexit, as it’s evident from this survey that they need to do more to prepare.”