Small Firms In Recovery Figures Show

The economic recovery has spread to smaller firms and those that don’t export, according to the latest business monitor from InterTradeIreland.

The cross-border body found that 88 per cent of firms across Ireland were either stable or in growth mode – the highest number recorded since the start of the recession.

More companies in the Republic are expanding – 47 per cent – compared to 40 per cent in the north.

Around 12 per cent of businesses increased their staff during the third quarter while the number reporting profitability jumped to 59 per cent.

InterTradeIreland’s strategy and policy director Aidan Gough, pictured, said: “Up until now, the recovery has been driven by exporters and larger firms but, significantly, we are beginning to see an upturn in domestic demand, which is now benefitting businesses that rely on the local market.

“The increase in growth in Q3 reflects a continuing broad-based recovery, which has now translated across every sector surveyed. The growth is also filtering down to smaller firms, most of whom now have a more positive outlook.

“Despite a reserved outlook from businesses last quarter, firms across the island are reporting an increase in sales for Q3. This is more so for southern businesses which have experienced a jump in the number of firms reporting a rise in sales from 39 per cent to 46 per cent.

“The number of NI companies reporting an increase in sales is also at the highest level since the recession began but has grown more modestly, rising from 33 per cent in Q2 to 36 per cent in Q3. The slow but steady improvement in employment is also very encouraging.”

Challenges facing businesses included the rising cost of overheads, energy costs and cash flow while a quarter of firms also stated that the current economic climate is affecting their business, with 18 per cent reporting taxes and rates as having a detrimental impact.

“There is still an element of caution in the marketplace in terms of investment intentions. Businesses are 50/50 when asked if they are more or less cautious about future business investment than this time last year,” said Mr Gough.

“This reflects the uncertainty in wider international markets and in the falling demand in the Eurozone. Prudence is, of course, not necessarily a bad thing if associated with good business planning and cash management but firms should ensure that they are not missing opportunities.

“We would encourage SMEs seeking finance to do so in a strategic manner and to look and explore all finance options available to them as the Q3 business monitor showed that firms are still very reliant on short-term solutions such as an overdraft, business credit card or commercial loans.”