Business

A third of Irish small firms 'barely breaking even'

A third of small firms, on both side of the border, say they are barely breaking even, according to IntertradeIreland
Gary McDonald Business Editor

SMALL businesses on both sides of the border continue to feel the pinch as the uncertainty around Brexit bites.

And nearly a third admit they are barely breaking even in the current trading climate.

The figures are contained in the latest InterTradeIreland business monitor, covering the third quarter (July-September) and which surveyed 750 businesses of all sizes in all counties.

The monitor, which track all-island economic indicators such as sales, employment, business outlook and other specific topical research areas, found that, in general, the business environment remains positive, with 46 per cent of companies reporting growth and 44 per cent declaring themselves as stable.

But the figures mask some worrying signs for small firms, and the construction sector in particular.

It is starkly set out by the fact that 29 per cent of micro businesses report they are very unprofitable or, at best, just breaking even, while the outlook for construction has softened, with one in four firms experiencing a decrease in sales this quarter.

Unsurprisingly, Brexit remains the single biggest challenge with the continued uncertainty having a tangible negative impact on rising numbers of firms

More than a third (37 per cent) of firms across the island cite Brexit as having a negative impact on their business - double the figure of the same survey a year ago.

But the number of firms claiming to have a Brexit plan in place is increasing, with 28 per cent having taken mitigating action in areas such as supply chain, contracts and cash flow.

Aidan Gough, InterTradeIreland’s designated officer and director of strategy and policy said: “We are obviously concerned with the rising negative impact of Brexit on business performance, but are reassured to see more cross-border SMEs start to prepare.

“Although Brexit remains the single biggest challenge facing businesses we would also draw businesses attention to the challenges and opportunities of new technology.

“Our latest survey shows that 70 per cent of businesses across the island do not think that changes in digital technology will have an impact on their business in the next 12 months.

“This is despite the fact 16 per cent have already upgraded to new smarter technologies over the past year while a further 16 per cent intend to do so over the next year.

“While not losing sight of the elephant in the room which is Brexit, InterTradeIreland is also focused on helping SMEs innovate and prepare for the challenges and opportunities of the future,” he added.

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