Competition Not Cost Is Firms’ Biggest Concern

22 Feb 2016 | 11.49 am

Competition Not Cost Is Firms’ Biggest Concern

InterTrade Ireland survey findings reflect growing economy

22 Feb 2016 | 11.49 am

Business concerns in Ireland are shifting from rising costs to factors more typical of a growing economy, such as robust competition and price wars, according to InterTrade Ireland.

The cross-border trading organisation released the findings of its Q4 2015 Business Monitor Report today, based on responses from over 750 business owners across the island of Ireland. In it, more than half of the businesses consulted cited competition and discounting by competitors (both at 54%) as a key issue for their business.

InterTrade Ireland said that, when coupled with cashflow worries at 49%, the findings were indicative of business conditions with low margins in a competitive market.

Some 68% of firms told InterTrade Ireland that they were quite profitable or very profitable in the Q4 report, while 77% were running close to or at full capacity.

For the first time since 2013, almost nine out of 10 (89%) firms said they were stable or growing, although the momentum of growth showed signs of diminishing and being replaced by stability.

Growth

Other elements of the report assessed growth activities among Irish companies. According to Aidan Gough (pictured), strategy and policy director at InterTrade Ireland: “Companies that are in growth mode are characterised by their investment in innovation and exporting to new markets, including the cross-border market on the island.

“Once again, the trends are showing that businesses which export are forging ahead of those solely focused on their home markets. 54% of companies with cross-border sales are experiencing growth, compared to 30% which don’t.”

Employment remained mostly static in Q4 2015, with most gains in those with 50 or more employees, where 40% increased their workforce, compared with 5% for small or micro companies. Around 17% of companies are expecting to increase their employees over the coming months, with only 3% concerned about any shortage of skills.

Gough added: “With the lack of inflationary pressures in the marketplace, the immediate threat of an increase in interest rates appears to have abated again for the present.

“We asked companies what they felt the effect would be in terms of borrowing or debt if rates were to increase in the future. Two-fifths (39%) of businesses felt that there would be consequences for them, with 15% of those with more than 50 employees feeling this would have a lot of impact, presumably as borrowing and leverage is higher in these firms.”

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