Irish firms are increasing their scrutiny of Britain’s European referendum as they weigh up the risks to their businesses from the prospect of a British exit from the European Union (Brexit).

The firms believe it would be better for Britain to remain in the EU, a survey by The Irish Times suggests. The survey comes ahead of a Brussels summit this week at which British prime minister David Cameron will press for a deal to recast Britain's membership of the union.

Respondents cited concerns about the potential of a Brexit to disrupt economic growth, currency markets, financial markets, trade with Britain and cross-Border trade. They also expressed anxiety about increased costs from British suppliers and possible disruption to plans for capital investment, mergers and acquisitions.

Many said the matter was being assessed by their boards, with a response at strategic or corporate level under discussion in firms with large British operations or whose clients have such operations.

“Were Brexit to become a reality, there will likely be a period of extended volatility and uncertainty and that would likely be a significant headwind for the UK economy,” said a big Irish firm that makes about half its profit in Britain.

However, in some cases board discussions were “general” or “informal”. Many firms do not have a strategy to deal with a Brexit.

Uncertain outlook

“We await the outcome of the concessions to be negotiated and are constantly reviewing this,” said one firm, which has supply and retail operations.

Firms also said their assessments were limited by the uncertain outlook for the referendum and a lack of data about Britain’s relationship with the EU if Brexit took place.

“This has been discussed at each board meeting over the last three months. However, it is regarded as an area that we cannot control and, therefore, is not high on our agenda,” said a services firm with Irish and British operations.

A total of 21 Irish-owned and publicly-quoted firms submitted responses to the survey, which was carried out in recent weeks in a cross-section of sectors. The potential for an adverse impact on Irish businesses was widely acknowledged.