Most businesses in the Irish Republic and Northern Ireland that trade across the border are completely unprepared for a hard Brexit, according to a report.

Only 6% are ready for cashflow and liquidity problems if the UK leaves the EU without a deal on 31 October, according to a survey commissioned by InterTradeIreland, a body that advises small and medium-sized companies.

Similarly, just 6% of cross-border traders have examined the legal implications for business contracts.

It was “startling” evidence companies were ignoring the looming threat, said Aidan Gough, InterTradeIreland’s head of strategy and policy, in a statement.

“Ignoring Brexit is a bigger issue than not preparing for it. Failing to take into account how it may impact your business could be very detrimental down the line ... Brexit is now just too big to brush under the carpet.”

If market access changed, businesses could face significant additional costs unless they took urgent steps to protect themselves, said Gough.

The survey, based on feedback from more than 750 business managers on both sides of the border, also found fewer than one in 10 businesses had examined the potential impact of a no-deal Brexit on supply chains.

The findings suggest profound paralysis or resilient optimism among businesses that a hard Brexit will be avoided.

Meanwhile, consumer and business sentiment has dropped to a new low, according to a report from the Bank of Ireland. The bank’s economic pulse indicator, which fuses consumer and business indices, fell nearly four points, to 79.1, in August – 12 points lower than this time last year.

“The economic pulse headed south again in August and sentiment could remain ropey for a while yet given the unsettled Brexit backdrop,” said the bank’s chief economist, Loretta O’Sullivan.

“At the time of last month’s survey, Boris Johnson hadn’t been confirmed as UK prime minister but that expectation was enough to knock sentiment. So households and firms are understandably worried and unsurprisingly consumer and business confidence took another hit in August,” said O’Sullivan.

The darkening mood follows a stream of warnings about possible havoc of a no-deal Brexit in Ireland and the UK. “We should all be afraid of a no-deal Brexit,” the taoiseach, Leo Varadkar, said recently.