Building Your Business
Seventy Per Cent of SMEs to Invest Over Next Twelve Months on Island of Ireland

3 September 2014

by Debbie Orme in Smart Money.com

Signs of a broad-based recovery across the island of Ireland continued to emerge in the second quarter of this year, with positive sales and employment performance across all sectors. The number of businesses increasing employment remains at its highest level since 2009 with eleven per cent of firms reporting an increase in staff. This quarter, 37 per cent of businesses also reported an uptake in sales, providing an overall positive picture of current performance.

Figures from Q2 2014 InterTradeIreland Business Monitor also revealed that more than two thirds of firms (69 per cent) plan to invest in their business over the next twelve months, with plans to increase marketing activity topping the poll (50 per cent), followed by investment in staff training (32 per cent). Manufacturing firms and those exporting are the most likely to invest over the next year according to the survey.

‘It is encouraging to see such a significant percentage of firms planning to invest,’ said InterTradeIreland’s Dr Eoin Magennis, ‘and this may reflect a change in businesses focus towards strategies for growth at a time when many firms are expressing cautious optimism about the future.’

The note of caution can be seen in the in the number of firms in growth mode this quarter, falling to 30 per cent from 37 per cent in Q1. The fall is much more marked among businesses in Ireland than in Northern Ireland. However, firms across the island are reserved about employment and sales outlook over the next twelve months.

‘Although the growth figures are much stronger than twelve months ago,’ Dr Magennis continued, ‘the dip in the number of firms experiencing growth this quarter aligns with findings from other economic surveys. This could be related to external factors, such as weak growth in the Eurozone market, or to the increased speculation about a rise in interest rates. Businesses also remain concerned about cost inflation and the linked and growing issues of cashflow and late payments.’

The Q2 2014 Business Monitor also found that 82 per cent of firms surveyed are not currently exporting. However, it was also revealed that almost one in five businesses (19 per cent) have a product or service suitable for export but don’t sell across the border or further afield. Firms reported that the main challenges to export cross-border and off-island were: a lack of time or management resources (26 per cent), the perceived cost associated with entry to new markets (24 per cent) as well as lack of internal financial resources (21 per cent) and a lack of awareness of available support (17 per cent).

‘Given that we consistently see exporters significantly outperforming domestically-focused businesses and that they are very positive about increasing their sales in the next year, it is vital that we ensure that any potential exporter is encouraged and supported. InterTradeIreland offers a range of supports to tackle some of the resources issues identified by potential exporters as a barrier to taking their first steps along the exporting pathway,’ Dr Magennis concluded.

For more information on InterTradeIreland and the business support programmes available, please visit http://www.intertradeireland.com/. A copy of the 2014 Q2 InterTradeIreland Business Monitor Executive Summary can be viewed at: http://www.intertradeireland.com/researchandpublications/.

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