Impact of Brexit on Irish Economy and Business of Significant Concern for Directors

A recent survey by the Institute of Directors in Ireland (IoD) with just under 400 of its members* has found that 9 in 10 directors and business leaders are concerned about a potential UK exit from the European Union and the vast majority believe it would have a negative impact on Ireland’s economy. Business leaders are overwhelmingly in favour of the UK remaining in the EU, with 96% citing a UK vote to remain as their preferred outcome of the referendum on 23rd June 2016.

The findings are released as the IoD hosts an event for 200 business leaders in the Westbury Hotel in Dublin this morning on the risks and implications of Brexit, with guest speaker, Philippe Legrain, senior visiting fellow at the European Institute of the London School of Economics and former economic adviser to European Commission President, José Manuel Barroso.

Key findings

• 92% of directors are concerned or very concerned about a UK exit from the EU

• 87% believe a UK exit would have a negative impact on Ireland’s economy

• 96% of business leaders say a UK vote to remain in the EU is their preferred referendum outcome

• 81% are concerned that the Irish Government and its institutions are not adequately prepared should the UK vote to leave the EU

• Over three-quarters of directors believe Irish businesses are unprepared for a potential Brexit; just 12% of organisations have put contingency plans in place

• 1 in 2 say their organisation will be impacted if the UK votes to leave the EU

• 91% say the strength of the EU will be negatively impacted by a UK exit and 70% say it will lead to other EU countries seeking reform packages or exiting

Economic and business impact

In an Irish context, the vast majority of business leaders surveyed believe a UK exit from the EU would have a negative impact on Ireland’s economy and 81% say the Irish Government and its institutions are inadequately prepared in the event of a UK vote to leave.

In addition, 79% of business leaders surveyed believe that Irish businesses are unprepared to deal with the potential consequences of a UK exit from the European Union, with the issue of Brexit having been discussed at board level in two-thirds (66%) of organisations, however, just 12% report that their organisation has put contingency plans in place in the event of the UK voting to leave the EU on 23rd June 2016.

This is of concern given that 63% of directors surveyed say they have direct business interests in the UK, while 1 in 2 (48%) believes their organisation will be impacted by a UK vote to leave and of those, 88% expect a moderate to significant negative impact.

Commenting, Maura Quinn, Chief Executive of the Institute of Directors in Ireland, said:

“As the UK’s nearest neighbour, with strong economic ties, trade and business interests, Ireland has a very significant interest in the outcome of the upcoming UK referendum on EU membership. The Brexit vote is clearly cause for concern among business leaders, the majority of whom believe that Irish businesses and the Irish Government need to step-up their preparations in the event of a UK vote to leave the EU.”

When examining the potential impact of a UK vote to leave the European Union, of greatest concern to Irish business leaders is the impact on trade, including that with Northern Ireland, Ireland’s growth potential and possible devaluation of sterling.

Almost all directors surveyed (91%) are of the view that the overall strength of the European Union will be negatively impacted should the UK vote to leave and a further 70% believe that such a result could lead to other EU countries seeking reform packages or exiting.

Commenting on the results, Philippe Legrain, said: "The IoD survey findings show very clearly that Irish directors are concerned about the negative consequences for Britain, Ireland, the EU and their businesses of a potential Brexit - and rightly so. At a time when the crisis-hit EU is already unravelling, Brexit could have disastrous repercussions. Every vote counts, so everyone with family, friends and contacts in Britain should try to persuade them to vote to remain in the EU."

*Online survey conducted between 4th - 12th May 2016 with a sample of 377 members of the Institute of Directors in Ireland.

Philippe Legrain will address over 200 members of the Institute of Directors in Ireland in the Westbury Hotel in Dublin on Thursday, 19th May 2016 at 8.30am on the risks and implications of Brexit. The event is facilitated by Aine Lawlor.