05 Nov 2019 | 02.18 pm
SMEs Curb Spending Due To Uncertainty
Bibby Q3 Confidence Tracker
05 Nov 2019 | 02.18 pm
Confidence is slumping in the Irish SME sector as Brexit fears and economic uncertainties bite, according to research commissioned by Bibby Financial Services Ireland.
Bibby’s latest SME confidence tracker report is based on a survey of over 200 SMEs across the Republic of Ireland, one of a series of surveys conducted on a bi-annual basis.
The report found that the average planned investment among SMEs over the next three months is €80,000, a 40% drop when compared with Q3 of 2018.
In addition, less than half of all SMEs surveyed expected sales to increase over the next three months.
Bibby also found that half of all SMEs not intending to invest cited the uncertainty arising from the UK’s exit from the EU, while 45% also pointed to an uncertain economic environment within Ireland.
For those that are investing, a need to reduce operating costs and increase efficiencies was cited as the primary reason by 30% of businesses, followed by a need to stay ahead of competitors.
Asked about measures taken to offset any Brexit fallout, more than one-third of SMEs said they have established new supply sources, while around the same proportion have negotiated new agreements with buyers and suppliers.
One-third also reported that they have applied for some form of business funding in the past six months.
However, while almost two-thirds (64%) of Irish SMEs believe Brexit will have a negative impact no their business, one-third of businesses have not prepared for it in any way.
The survey also found that 35% of SMEs have suffered a bad debt over the previous 12 months, with the construction and transport sectors most likely to be affected.
Bibby also asked SMEs if they had applied for business funding over the past. Of the one-third that had done so, most had applied either to a bank or for a government grant.
Bibby Financial Services Ireland managing director Mark O’Rourke (pictured) said that the survey showed that Irish SMEs are cutting their cloth to suit their needs and attempting to insulate themselves as much as possible from the fallout of Brexit.
“While it’s certainly encouraging to see SMEs diversifying their approach, it’s crucial that more businesses begin to look beyond the UK and shift more of their imports and exports to other markets,” he added.