Business confidence among Irish small and medium sized businesses has fallen after the Brexit vote in the UK, a new survey shows.

ISME's Quarterly Business Trends survey for the second quarter of 2016 shows that the Brexit fallout has replaced economic uncertainty as the biggest concern for SME owners.

60% of respondents to the survey expect Brexit to have a negative effect on their bottom line, with 32% expecting no change.

ISME said that the services sector is the most affected by the Brexit situation, while the retail sector showed a mixed result as the sector continues to come to grips with the recent increase in the national minimum wage/.

Mark Fielding, ISME's chief executive, said that it was not surprising that the index indicators are negative.

"The initial post Brexit shock, with the sterling drop in value have combined with the ongoing increasing business costs, continuing difficulties in accessing bank finance and late payments to reduce SME business confidence," Mr Fielding stated. 

Mr Fielding said the Government must ensure that Irish interests are protected and in particular the SME sector, which accounts for over 70% of the private sector employment.

"While we recommend that a dedicated unit be set up to coordinate all national efforts post Brexit and there are numerous calls to have IDA, Enterprise Ireland and all our embassies active in promoting Ireland as a destination for business and as a supplier of goods and services, we must also ensure that the country protects and improves its competitiveness," he added.