The impact of Brexit is continuing to affect the growth of Irish businesses, according to new research collected in Grant Thornton Ireland’s International Business Report. The report highlights that Irish businesses have refocused international sales strategies to stimulate growth in light of recent challenges. Some 37% of businesses surveyed during the first six months of the year indicated longer lead times in supply chains as a consequence of Brexit. As a result, some 22% of businesses reported needing to recruit alternative global suppliers, while 21% reported recruiting alternative suppliers in Ireland.
Meanwhile, almost a fifth (17%) had to outsource or recruit to deal with additional bureaucracy with 17% also targeting a customer base outside of the UK.
In line with the renewed focus on international sales, some 38% of Irish businesses surveyed expect to grow exports over the coming 12 months. 33% of businesses expect to increase revenue from non-domestic markets while 30% expect to increase the number of countries they sell to.
In spite of the additional challenges posed by Brexit, the UK remains the main territory for company growth in the case of 33% of businesses surveyed. Germany was identified as the main territory for 17% of businesses, followed by 16% of businesses which identified the US as the main territory.
However, more than half of businesses (51%) noted red-tape and regulation as a constraint to growth of their company – likely a consequence of varying regulations involved in selling to international markets, as well as the additional checks required when trading with the UK that were not in existence prior to Brexit.
Commenting on the results of the International Business Report Jarlath O’Keefe, Head of Indirect Taxes at Grant Thornton Ireland, said: “While the UK remains to be an important player within Ireland’s export market, the previous over-reliance of the past is no longer a reality for two-thirds of Irish businesses as they explore alternative markets in countries such as the US, China, Germany and France.
The administrative burden associated with importing goods from the UK has also forced many Irish businesses to consider alternative suppliers, with many opting to recruit Irish suppliers and those who continue to trade with the UK facing additional checks and regulations that may also hamper their growth.”
In spite of the consequences of Brexit and the trading difficulties prompted by the global pandemic, some 76% of Irish businesses remain optimistic for the coming 12 months.
Commenting on the latest research, Janette Maxwell, Associate Director in Tax at Grant Thornton Ireland, noted: “Businesses remain optimistic for the future, but it’s clear that Brexit and the pandemic will have an impact on trade and growth into the future. International sales present an opportunity to mitigate the financial impact of these global events, and as the world opens up again, businesses will continue to look abroad for expansion of their operation, whether that’s in increased exports or in sourcing more efficient suppliers.”
