New research from Bibby Financial Services has found that while 80% of Irish SMEs plan greater investment in their business in the second quarter of 2019, only 51% of UK businesses intend to follow suit, amid the uncertainty caused by Brexit.
The SME Confidence Tracker, produced by Bibby Financial Services, is a national survey of over 200 small and medium sized enterprises across the Republic of Ireland and 1,000 businesses in the UK, conducted on a bi-annual basis.
The research shows that 41% of UK SMEs believe Brexit will have a negative impact on their business, and 32% of Irish SMEs similarly seeing it as the biggest challenge to their business. Confidence is particularly low in the UK, where 57% of SMEs believe the country will slip into recession in 2019.
However, despite the greater rate of investment in Ireland, the average amount invested by both Irish and UK SMEs has fallen over the last twelve months. In the UK the average investment figure stands at just over £65,000, down from over £100,000 in Q1 of 2018, while in Ireland SMEs are planning an average spend of €110,000 over the next three months, down from €142,000 twelve months ago.
The research also points to the divergent approaches adopted by UK and Irish SMEs in their preparations for Brexit. In the UK, businesses have focused on building up their company’s cash reserves (21%), establishing new supply sources for goods (15%) and greater stockpiling of goods (15%).
In Ireland, by contrast, the main areas of investment are staff training and development (42%), digital and IT capabilities (33%) and additional machinery and equipment (33%).
Commenting on the index, Managing Director at Bibby Financial Services Ireland, Mark O’Rourke said, "The research shows the differing approaches of Irish and UK SMEs in the face of continued Brexit uncertainty. In general, Irish SMEs remain more optimistic than their UK counterparts, and are focusing on investment in order to grow and future-proof their businesses as much as possible."
He added, "Worryingly, however, over half of UK SMEs expect the country to enter recession this year, and there has been a marked reduction in investment in response to this."