CAREERS 2019: Brexit to create an opportunity for some sectors

“In the middle of difficulty lies opportunity,” Albert Einstein once famously said, and although Brexit has become every bit as random and unpredictable as anything you’ll find in quantum physics, it’s looking like there are some areas where Ireland could benefit.

The financial sector has long been touted as a prime candidate for post-Brexit expansion as London-based companies begin shopping around for a new EU base of operations.

Ireland is seen as a gateway to both the EU and the US, and our educated, English-speaking workforce within the single market has significant appeal.

Also, given the geographical and cultural proximity to Britain, companies can expect relatively little difficulty in convincing key UK workers to re-locate.

Some key players in the industry have already stated their intentions.

A recent PwC survey of European asset managers named Ireland as the preferred jurisdiction to relocate UK functions to, in the event of a ‘no-deal’ Brexit.

The EY Brexit Tracker places Dublin as the most popular post-Brexit location, with 21 financial services organisations already confirming plans to move some or all of their operations from the UK to Dublin.

Dublin polls as the #1 relocation choice for financial services firms, according to our Brexit tracker: https://t.co/2vZtYQIVzE#mindsmadeforFS #Brexit #financialservices #Dublin pic.twitter.com/Tw7Oj091L7

— EY Ireland (@EY_Ireland) October 12, 2018

In terms of sectors from which these companies originate, 60% are from the financial sector, over one quarter are legal firms and the remainder a mixture of insurance, fintech and service providers — creating around 1,500 new jobs, according to Goodbody analysis.

The same study also identified a further 17 firms — again, mostly financial — who have also stated their intention to increase their Irish presence after Brexit, creating at least 1,000 new positions.

Ireland’s Central Bank governor Philip Lane had confirmed as much at the European Financial Forum earlier this year.

“Many types of entities — including banks; insurance companies; asset management firms; and payments and electronic money institutions — have made applications to the Central Bank of Ireland,” he said.

“The potential activities range from: broker dealers; trading venues; electronic money institutions; commercial insurance; and retail insurance.”

We could already be witnessing the beginning of this trend.

The number of financial services jobs becoming available has now risen for three consecutive months, with recruitment activity “noticeably higher” than last year, Morgan McKinley’s Global FDI Director Trayc Keevans confirmed recently.

She also highlighted strong demand among employers for HR professionals: “These are handling strategic organisational requirements and programmes arising from growth and change, including the response by industry in Ireland to Brexit.”

As the rate of net inward migration to Ireland from the UK continues to rise, those invested in the residential property rental market could also be set to benefit.

Demand could be especially high in urban areas, particularly Dublin, where most of these new finance sector jobs would tend to be based.

Other areas with a well-developed broadband infrastructure could also benefit however, as modern companies look to attract staff with remote-working opportunities — producing positive ripple effects for local economies.

One such area could be Skibbereen in West Cork, which has seen a pilot venture between the ESB and Vodafone bring 1-gigabit internet speeds to the area.

Local estate agent and auctioneer Charles McCarthy has already sensed something in the air, saying: “Since talk of a no-deal Brexit has intensified, enquiries have picked up from UK residents looking to leave and stay in the EU.”

Commercial property developers seem to have sensed an opportunity.

Despite the obvious need for residential property, commercial building was the strongest performer in Ulster Bank’s last construction purchasing managers’ index (PMI), reaching 53.9 in October.

A cumulative 450,000 square metres of office space is currently under construction and due to come on stream between now and 2021, with planning permission granted for 400,000 square metres, accommodating around 39,000 employees.

Whatever importing headaches Brexit may present, the outlook for the Irish construction industry remains bright.

There could even be a nostalgic return to the days of duty-free shopping.

TDs and MEPs are already being lobbied to allow the re-introduction of tax-free shopping outlets in Irish airports, which could produce extra €45.4m in annual travel retail sales, supporting another 450 jobs, a study commissioned by the Irish Duty-Free Alliance (IDFA) states.

Looking at the Irish economy as a whole, it appears that, so far at least, the prospect of Brexit seems to be having little effect on the most vital resource for SMEs — access to credit.

“The impact of Brexit on the Irish banks remains benign at present, with no material impact reported on funding/liquidity or credit quality,” a September report from the Irish Central Bank’s Brexit Task Force reassuringly states.

A recent economic forecast by EY is particularly optimistic.

Last June’s Economic Eye report went as far to predict 236,700 net additional jobs across the island of Ireland before 2022.

In a recent survey of Irish CEOs, when asked what impact Brexit would have on their business over the next three years, less than a third reported that they thought they would have lower profits, with 84% planning to expand over the next 12 months.

Neil Gibson, Chief Economist at EY, said that “assuming a relatively smooth Brexit, which clearly remains a risk, Ireland is projected to remain one of the fastest-growing developed nations in the world.”

Yet while all this optimism is encouraging, it’s vital that companies prepare themselves for what’s ahead.

Intertrade Ireland’s Quarterly Business Monitor’s finding that just 5% of firms in the Republic and just 3% in the North have a Brexit strategy in place is a concern.

Exporters, in particular, will face challenges, but the necessity to diversify into new markets, though painful initially, could produce benefits in the long term.

There are supports in place.

The Government has been hosting a series of Getting Ireland Brexit Ready roadshows around the country, providing not only much-needed information and guidance but also for networking and collaboration opportunities.

Many Irish businesses are also in a position to benefit from a range of Government grants aimed at easing the transition.

Brexit loan scheme

The Government has made a €300m Brexit Loan Scheme available, with over 220 businesses already been approved for loans of a minimum €25,000.

The Enterprise Ireland Be Prepared Grant — which offers up to €5,000 in support — is also available to small businesses who complete a Brexit Scorecard as part of their application.

The scorecard itself is a starting point in its Prepare for Brexit campaign and can help identify areas of potential risk and opportunity arising from the new economic climate.

Enterprise Ireland has a wide range of supports to help you Plan, Innovate, Compete & Diversify in response to the risks and opportunities that #Brexit presents. Click the link to find out more: https://t.co/PtTEd4Ek6Z @BrexitReadyIRL pic.twitter.com/uQKRR0ld8T

— Enterprise Ireland (@Entirl) December 12, 2018

There’s even a Brexit Advisory service available.

Market Discovery Fund targeting market diversification and an Agile Innovation Fund to support product service and process innovations are also available.

Technical Assistance for Micro Exporters’ Grants of up to €2,500 are available from the Local Enterprise Office to part-fund the costs of investigating and researching export markets.

InterTradeIreland is also offering support up to €2,250 towards professional advice in relation to Brexit as part of its Start to Plan Vouchers scheme.

Given all these financial supports, it seems that no matter what the next few months have in store, we can at least be assured that one industry is guaranteed to thrive — Brexit consultancy!