New research suggests 38pc of SMEs have established new supply sources for goods, while 32pc negotiate new agreements with buyers and suppliers.
Irish SMEs have increasingly been innovating and adopting new measures to help cope with the fallout of Brexit by establishing new supply sources for goods and negotiating new agreements with buyers and suppliers, according to the SME Ireland Confidence Tracker for Q3 of 2019, published by Bibby Financial Services Ireland.
One third say they have applied for some form of business funding in the past six months.
“It’s clear that Irish SMEs are cutting their cloth to suit their needs and attempting to insulate themselves as much as possible from the fallout of Brexit”
The proportion of SMEs exporting and importing has increased in line with this, by 8pc and 6pc respectively, compared to Q1 of this year. However, the survey also revealed that, while almost two-thirds (64pc) of Irish SMEs believe Brexit will have a negative impact no their business, a third of businesses have not prepared for it in any way.
Dramatic fall in confidence
The report’s findings also indicate that there has also been a dramatic drop in confidence in the Irish SME sector over the past 12 months, with the average planned investment of €80,000 for the next three months representing a 40pc drop when compared with Q3 of 2018. In addition, less than half of all SMEs surveyed expected sales to increase over the next three months.
Half of all SMEs not intending to invest cited the uncertainty arising from the UK’s exit from the EU, while 45pc also pointed to an uncertain economic environment within Ireland. For those that are investing, a need to reduce operating costs and increase efficiencies was cited as the primary reason by 30pc of businesses, followed by a need to stay ahead of competitors.
The survey also found that over a third of SMEs (35pc) suffered a bad debt over the previous 12 months, with the construction and transport sectors most likely to be affected.
SMEs were asked if they had applied for business funding over the past. Of the third that had done so, most had applied either to a bank or for a government grant.
“It’s clear that Irish SMEs are cutting their cloth to suit their needs and attempting to insulate themselves as much as possible from the fallout of Brexit,” explained Mark O’Rourke, managing director at Bibby Financial Services Ireland.
“Even with a withdrawal agreement in place, Brexit is set to hugely disrupt existing business and export practices and add further costs and red tape to businesses importing and exporting to the UK.
“While it’s certainly encouraging to see SMEs diversifying their approach, it’s crucial that more businesses begin to look beyond the UK and shift more of their imports and exports to other markets.”
Written by John Kennedy (firstname.lastname@example.org)
Published: 7 November, 2019