Businesses are facing serious challenges despite the buoyancy of recovery, according to the InterTradeIreland Business Monitor Report for Q1, with rising energy, overhead and supply costs and an “intensely competitive economic environment” counteracting buoyant levels of market confidence.

The report reveals that while 82% of businesses continue to hold their ground or to grow, there has been a 50% increase year-on-year in the number of businesses that are struggling, from 12% in Q1 2016 to 18% in Q1 2017.

The findings show there is a strong level of business and consumer confidence, with more firms reporting growth in sales in Q1, up from 59% last quarter to 63%. Across all sectors, more businesses have increased employment than have reduced staff numbers, and confidence in the future remains positive.

Larger companies and those that export are more likely to be growing (62% and 55% respectively) compared to around a third of micro-firms (35%) and non-exporters (32%). Nevertheless, those facing the greatest competitive challenges are in the ‘retail, distribution and other services’ sector and the construction sector, where 27% and 24% of businesses describe themselves as reducing, surviving at all costs or winding down.

In these sectors, many businesses are more likely to face challenges dealing with rising costs either in absorbing them or passing them on in the face of intense competition. Micro-businesses are also finding it more difficult to compete, with 20% reporting difficult conditions compared with only 4% of firms employing more than 50 people.

Support Programmes

InterTradeIreland strategy director Aidan Gough (pictured) said: “The results from the Q1 business monitor show the economy remains buoyant but operationally challenging, with many counter-balancing issues to deal with. In such an environment it’s easy to lose sight of strategic moves that can protect and grow businesses. InterTradeIreland’s support programmes such as FUSION and Acumen, which help firms to develop opportunities in innovation and export, are delivering lasting, tangible benefits to participants.”

The Business Monitor also found that 98% of firms are still not making any plans for the UK’s exit from the European Union, and Gough added: “Brexit is an issue that will affect business right across the island so it is concerning that almost all of those surveyed have not started any forward planning. The intensely competitive environment may explain this, with firms more focused on facing the current challenges, in addition to the lack of information available on the various potential avenues of impact.

InterTradeIreland recently unveiled a Brexit Advisory Service  offering support and encouragement to businesses to ‘Plan, Act and Engage’ in preparation for Brexit.

Photo: Mary Mitchell O’Connor TD (right), Minister for Jobs, Enterprise and Innovation, launching the Brexit Advisory Service with InterTradeIreland CEO Thomas Hunter McGowan (left) and his colleagues Aidan Gough, Director of Strategy & Policy, and Margaret Hearty, Director of Business Services and Programmes