Nearly a half of businesses on the island of
Ireland are winding up, contracting or simply trying to survive according to a
survey published today.
InterTradeIreland’s latest Business Monitor
survey for Q3 indicates that a lack of finance for investment is constraining
growth for one third of businesses in Ireland. The monitor, which surveys 1,000
companies across the island on a quarterly basis, highlighted that businesses
have seen a decline in sales and cashflow, with there being a perceived lack of
access to finance from the banking system.
However, despite this lack of cash, only one in
10 businesses approached their banks for funding. 70% of respondents felt that
their bank had little or no understanding of their financial needs, with the
manufacturing sector having the least satisfaction with their business bank
relationship than those in other sectors.
Other interesting findings from the report
- 60% of businesses were unaware of credit
insurance and only one in ten businesses have it.
- Of those who did restructure their credit
arrangements, 60% who approached their bank and 72% who were approached by
their bank were satisfied with the outcome.
- Loans and overdrafts were not well received
by business - 61% of respondents said that loans and overdrafts were either
not very attractive or not at all attractive
Small businesses are still the suffering
disproportionately from the economic downturn with nearly half (46%) of
businesses reporting that they are winding up, contracting or simply trying to
In general, the economic outlook is much the same as seen in the previous couple
of years, at a consistently low level with no sign of any significant uplift.
This is reflected in only 6% of companies planning to increase employment in the
Aidan Gough, director of Strategy and Policy with InterTradeIreland, said:
“We are faced with a complex trilemma; a decline in customers, a fall in
confidence and contraction in cash with each reinforcing the other, creating a
vicious circle that is difficult to break out of. The fact is that nine out of
10 businesses are reluctant to approach banks for funding. The disconnect
between the funding businesses require and what banks are willing to provide is
an issue that has to be addressed.”
“The Business Monitor also indicates that those who export or who have
cross-border sales are significantly more likely than those who rely solely on
the domestic market to report increased sales, and are less likely to have
experienced a decrease. Around 33% of companies which are exporting or involved
in cross-border trade are reporting increased sales, compared with only 19% of
those which are operating solely in local markets. The roadmap is very clear - -
we need more companies exporting,” concluded Aidan Gough.
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