Business

Firms focus on holding their ground as innovation takes back seat

For many businesses involved in cross border trade, there is still a degree of uncertainty around the new trading rules about to be introduced under the Windsor Framework, according to the latest business monitor from InterTradeIreland
For many businesses involved in cross border trade, there is still a degree of uncertainty around the new trading rules about to be introduced under the Windsor Framework, according to the latest business monitor from InterTradeIreland

MORE than half of businesses in Ireland have reported a "stable" last three months, and a third of firms say they are in growth mode.

But for some, there is still a degree of uncertainty about the new trading rules about to be introduced under the Windsor Framework.

The findings come in the latest quarterly all-island business monitor from InterTradeIreland, based on the views of more than 750 business managers across Northern Ireland and the Republic.

Sales performance and profitability were stronger in quarter compared to the previous three months - a sign that cost pressures are softening and margins are holding up, in spite of the headwinds of global inflation and higher interest rates.

Martin Robinson, director of strategy at InterTradeIreland, says: “The uncertain economic backdrop has led many firms to focus on stability and maintaining their current position.

“And encouragingly, some of the pressures faced by businesses appear to be easing, with concerns about energy costs falling back from recent levels.”

But the focus on maintaining a stable position has led to a reduce appetite for innovation, with 43 per cent of firms not having undertaken any such activity in the last two years.

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Martin adds, “While business performance appears to have returned to pre-Covid levels, a lack of forward momentum in innovation is likely to impede future growth.”

Looking ahead, a cautious sense of optimism prevails, with just under a quarter of businesses anticipating sales growth. Only seven per cent of firms expect sales to decrease over the next six months.

The implementation of the Windsor Framework is also on the radar for many businesses. Just over a quarter (27 per cent) of businesses identify Brexit as a continuing issue, down from a third (35 per cent) this time last year.

While 44 per cent of businesses indicate that they are not affected by the new trading conditions, the number reporting they have adapted to them largely or in full has dropped from over half to 34 per cent, the lowest in the last four quarters.

This, says InterTradeIreland, suggests a degree of uncertainty about the new trade rules forthcoming under the Windsor Framework.

“It is reasonable to assume that the ongoing implementation of the Windsor Framework has prompted more businesses to examine its practical implications,” Martin adds.

“To help address these concerns and provide clarity, InterTradeIreland has put in place a new Cross-Border Trade Hub that provides comprehensive information, the latest advice, guidance and practical support.

“Cross-border trade remains buoyant and presents significant growth opportunities for firms of all sizes. I’d encourage businesses to contact InterTradeIreland to find out how we can help.”