Business north of Border struggling less for growth during downturn

BUSINESSES IN the Republic of Ireland are suffering more than their counterparts across the Border as a result of the economic downturn, according to research from cross-Border body InterTradeIreland.

According to the latest InterTradeIreland Business Monitor survey, just over one in 10 companies in the Republic said they were either growing or expanding in the first quarter of 2012. North of the Border, the figure was double that, at 21 per cent.

However, access to finance is not solely a problem for businesses in the South, with 43 per cent of Northern Irish firms reporting difficulty in accessing finance, slightly higher than 41 per cent in the South.

About 37 per cent of all businesses surveyed reported a decline in sales in the first quarter of this year, representing a marginal improvement on the previous quarter when 41 per cent of respondents reported falling sales.

The survey found that while 39 per cent of Northern Irish companies are involved in cross-Border trade, only 22 per cent of businesses in the Republic export across the Border.

According to InterTradeIreland, expanding into cross-Border business is a key way of addressing the problem of reduced demand for goods which respondents identified as the main reason behind falling sales.

On average, only 15 per cent of businesses said they had experienced growth in the first quarter of this year.

“The fact that after three years still only 15 per cent of businesses are in growth mode shows the protracted nature of the current situation,” said Aidan Gough, director of strategy and policy for InterTradeIreland, although he noted that businesses had succeeded in reducing internal costs and in pricing their products more competitively since the downturn.

The survey found that 87 per cent of businesses are not applying for any type of credit, with only 4 per cent applying for loans and the remainder applying for overdrafts.

Just over half of those companies who applied for loans were successful in their application, the survey found, while 79 per cent of firms who applied for overdrafts were granted the facility.