With the Brexit deadline fast approaching and no real certainty of the outcome – this is a worrying time for a number of businesses throughout the island of Ireland. Since the new Prime Minister was appointed in the UK, the majority of conversations we have experienced with clients seem to predict a no-deal exit for Great Britain and serious consequences to a hard border between Northern Ireland and the Republic of Ireland for the Irish economy. A no-deal exit doesn’t necessarily guarantee a hard border but, in our opinion, the likelihood of a hard border significantly increases.
What will happen come October 31st nobody knows, however, what is certain is that a hard border between Northern Ireland and the Republic of Ireland will not be good for business. As you might be aware, PRL Recruitment is part of the PRL Group who boast a logistics fleet of over 200 vehicles and complete hundreds of bordering crossings between Northern Ireland and the Republic of Ireland each year. It is estimated that for logistic businesses such as PRL with modest sized fleets, even the shortest of delays at a border (15 minutes per crossing) can cost thousands of euros per annum. In December 2017, Diageo claimed that a hard border on the island of Ireland could cost them tens of millions of euro every year if Britain does not replicate the EU’s trade deals during Brexit negotiations.
The knock on effects of increased costs as predicted by Diageo can result in job losses, a hiring hiatus, reduction in trade throughout the island of Ireland and some even claim another recession. On July 31st the Central Bank issued a warning on the economic impact of Brexit and a no-deal exit; predicting the Irish economy will crash and become one of Europe’s worst performing economies with a predicted growth of just 0.7% next year despite being the fastest growing economy at present. Furthermore, the Central Bank predicts this slump in growth could impact 100,000 jobs throughout the island of Ireland.
The Central Bank predict a healthy growth of 4.9% this year and 4.1% growth next year if a deal is secured between the European Union and Great Britain. However, although 4.1% is significantly better than 0.7% the disruption of Brexit, new trade deals, policies as well as the reduced value of the British Pound may still impact Ireland’s ability to grow.
As one of Ireland’s leading recruitment agencies with offices in both Northern Ireland and the Republic of Ireland, we feel the next 6-12 months will be challenging from an uncertainty view point, but, until October 31st has passed and the outcome is clear, all we can do is speculate and prepare for all outcomes the best we can.
On a positive note, with just over 6 weeks to the ‘Brexit Deadline’, there are no signs of the Irish economy slowing down, just yet! The Irish Jobs Market remains as buoyant as it was in January this year and the volume of new vacancies being advertised is increasing month on month. Furthermore, a recent study by the Central Bank in conjunction with Indeed suggests that Dublin’s labour market is now as competitive as London; which is widely considered as one of the most competitive labour markets in the world. The research findings revealed there are roughly just two unemployed people for every one job vacancy advertised in Dublin. We interpret this data to suggest that the Dublin economy is still growing and is supported by the unemployment rate remaining consistent and steady at c.5%.
As mentioned above, it’s difficult to predict how Brexit will impact the Northern Ireland and Republic of Ireland economy, but, one thing is certain, neither our clients or the Central Bank predict a positive impact on the Irish Economy if Britain fail to secure a deal.