Business owners remain uncertain on economy

Isme calls for Government action on business costs

While business confidence among small- and medium-sized enterprises has increased significantly in the last year, economic uncertainty is at the lowest level since 2007. Photograph: Collins Photos
While business confidence among small- and medium-sized enterprises has increased significantly in the last year, economic uncertainty is at the lowest level since 2007. Photograph: Collins Photos

Uncertainty about the economic environment remains a major concern for business owners, with an upturn not being felt equally across all sectors, according to the Irish Small and Medium Enterprises Association (Isme).

The latest Quarterly Business Trends survey, released by the association, found retailers in particular were not benefitting from the reported increase in domestic demand, with current sales dropping by 15 percentage points compared to a year ago.

"Unfortunately, this precarious situation means that jobs will be lost in retail due to Government inaction," Isme chief executive Mark Fielding said.

While business confidence among small- and medium-sized enterprises has increased significantly in the last year, economic uncertainty is now at the lowest level since spring 2007.

'Cautiously optimistic'

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“As we enter the post-bailout era, SMEs are cautiously optimistic about the future. However, owner-managers are still concerned about economic uncertainty and the upturn is not being felt equally across all sectors,” Mr Fielding said.

The survey, conducted in the second week of December, found current and future employment experienced relatively strong increases in this quarter, in line with current and future sales.

Investment remained static at 26 per cent, a sign that, though economic recovery appears imminent, owner-managers are still unable to gain sufficient access to credit to expand and grow their businesses.

While sales expectations for December were very positive, this confidence was not felt across all sectors, with sales expectations declining in retail.

Isme said there was the potential for 50,000 jobs to be created by SMEs this year. However, this expectation is predicated on “direct action” from Government on State-influenced business costs.

“On the jobs front, it is encouraging to see a net 18 per cent of employers expecting to employ more next year, the most positive indicator since the summer of 2007,” Mr Fielding said.

He said the medium-term economic plan released prior to Christmas promised reports and policy actions from all Government departments.

“The plans that come from the Government departments in the new year must be specific, measurable, enterprise-oriented and concentrate on business costs so that the employment potential can be achieved.”

The association has called on the Government to assist economic recovery by outsourcing more State-sector services to SMEs, reforming the social-welfare system to make it more profitable to work and expanding the export capacity of the SME sector through soft supports.