TWO thirds of small businesses in Northern Ireland haven't grown at all in the last year as confidence continues to falter, a new business barometer has shown.
And SMEs say they are "deeply concerned" about the outlook for the economy as businesses are being buffeted by a broad range of headwinds.
Owners' fragile state of confidence and negative view of their prospects for growth are highlighted in the latest Close Brothers Business Barometer.
Fewer than one in 10 SMEs in the north say they are confident about the steady recovery of the economy, with a further 40 per cent suggesting that the path back to prosperity will be slow, even though they feel the worst of the challenges associated with the economy are now behind them.
But almost a quarter (24 per cent) fear the economy could decline again.
Some 28 per cent of respondents warned that Northern Ireland had not yet seen any true economic recovery, up markedly on the 17 per cent that reported this negative outlook at the start of the year.
The pessimism of so many SMEs reflects a variety of problems. The macro-economic outlook worries many business leaders, as the UK faces uncertainty ahead of the EU referendum and the global economy continues to waver. Firms also face issues such as the higher costs of the national minimum wage, pension auto-enrolment and new tax regulation.
Just a fifth (20 per cent) of SMEs expect their business to expand over the next 12 months, while half are anticipating no growth at all. Indeed 12 per cent expect to see their business contract over the year ahead.
“SMEs are deeply concerned about their prospects for the next 12 months,” says Ciaran McAreavey, managing director of Close Brothers Commercial Finance.
“We know that many entrepreneurs and business leaders have exciting and ambitious plans for their companies, but fear their plans are not achievable against a backdrop of economic uncertainty and rising costs. In many cases, SMEs now feel even more pessimistic than they did at the beginning of the year.”
