New research published on Sunday
that was undertaken with 1,000 business managers across Ireland, North and
South, shows that nearly half of all businesses in Ireland are contracting or in
survival mode. The results show that weak consumer sentiment is continuing to
have an impact on businesses with 70% of all companies surveyed citing reduced
consumer demand as a concern although 38% had moved to decrease prices over the
last quarter. Almost one third of businesses are reported to be struggling to
On the optimistic side, the results also show that one in six companies
currently describe themselves in growth or expansion mode with the businesses
most likely to experience positive growth in the manufacturing (23%), business
services (23%) or other services (23%). Companies with more than 50 employees
are also more likely to be growing than smaller businesses.
The research, which was undertaken
by the cross-border public agency, InterTradeIreland, over October to
December, assesses trends amongst businesses on a quarterly basis and indicates
an upward trend in sales projections.
Aidan Gough, director of
Strategy and Policy with InterTradeIreland, said: “The factors behind this
growth mode for firms have been laid bare by the Business Monitor. Those
businesses which are diversifying into new products or services or entering new
markets are those which are currently growing.”
“This is particularly true of market diversifying businesses which are almost
twice as likely (31%) to be in expansion mode as the norm (16%). Those firms
(21%) which are innovating their products and services are also more likely to
be in growth mode. Policies which encourage and support companies to innovate
and export are those which will lead directly to growth. The lesson from the
survey is that we need more of these companies driving the economy’s recovery.
Standing still is not an option. Continuous innovation is a core business
process for successful firms.”
InterTradeIreland’s survey indicates that around 30% of companies which are
exporting or involved in cross-border trade are reporting increased sales,
compared with only 18% of those which are operating solely in local markets.
Access to finance for day-to-day cashflow and cost control continue to be cited
as the main challenges. The rising costs of all overheads, but particularly
energy, is seen by two in five businesses as a ‘very large issue’ for them.
Aidan Gough commented, “The outlook is still in the
balance with 50% of firms contracting or in survival mode. We are unlikely to
see any significant increases in employment or growth in the short to medium
term. However the roadmap is very clear - - we need more companies
exporting and innovating.”