Unprecedented uncertainty from Brexit finally affecting SMEs, according to the latest SME Market Monitor8th March 2019
The latest BPFI SME Market Monitor, March 2019, prepared by EY-DKM Economic Advisory Services and published today by Banking & Payments Federation Ireland (BPFI), shows that unprecedented uncertainty from Brexit is finally affecting the Irish SME sector.
Tracking trends across 15 different indicators which are important for the performance of the SME sector, the monitor outlines how, despite weathering the initial uncertainty of Brexit, this continued indecision is negatively affecting SMEs who now need to ramp up their preparations for the possibility of a No-Deal Brexit. Speaking on the publication of the monitor, Annette Hughes, Director, EY-DKM Economic Advisory points to a range of trends which are a cause for concern including a sharp fall in consumer sentiment, a fall in retail sales for the third month running and a worrying trend in regard to visitor numbers from Great Britain, which have been overtaken by visitors numbers from mainland Europe for the second quarter in a row:
“In the midst of continued improvements in disposable income and widespread job opportunities, consumer confidence since July last year has fallen off considerably, as the likelihood of either a No-Deal Brexit scenario or indeed an extension of Article 50 have progressively increased. Our analysis shows that consumers are struggling to balance the possibility of an undesirable Brexit outcome with the reality of favourable macroeconomic conditions and there is evidence that this is starting to impact the sectors where SMEs tend to operate, such as retail, food and accommodation – sectors which are arguably also some of the most vulnerable to Brexit.”
And while Ms Hughes points to some of the factors which may mitigate the impact of Brexit uncertainty, such as the strength of the Irish economy, a healthy labour market and double-digit growth in new lending to SMEs, she cautions that the short-term outlook for SMEs is a growing concern:
“Ultimately, the prospect of a No-Deal Brexit or indeed an extension of Article 50, in tandem with a slowdown in some of the Eurozone’s largest economies remains a serious downside risk. As a consequence, and notwithstanding Ireland’s strong macroeconomic performance, a great deal of caution is warranted in regard to the short-term outlook.”
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
The report has been prepared by EY-DKM for BPFI.
Contact: Jillian Heffernan, Head of Communications, BPFI, Ph: 01 4748835 / 087 9016880
Pia Phelan, Senior Communications Manager, EY Ireland, Ph: 087 9327702