Confidence among small businesses continued to fall in the fourth quarter of the year, reaching a two-year low, as companies anticipated deteriorating business conditions and the domestic economy continued to suffer.
The survey carried out by the Irish Small and Medium Enterprises Association (Isme) said 59 per cent of companies viewed the current business environment as “poor” or “very poor”, the same as at the end of the third quarter.
Almost half of the companies surveyed said they expected the business environment to worsen in the coming year, compared with 38 per cent in the previous quarter. More than half of businesses said they were concerned that current conditions threatened the viability of their business, at 58 per cent. That compares with 53 per cent in the previous survey.
The retail sector was the most pessimistic about its future prospects, the survey found, with retailers facing weak domestic demand and little prospect of an upturn in the coming year. Manufacturing and construction were also less enthusiastic about business prospects.
The retail sector also reported the highest incidence of job losses, with the services sector and construction close behind.
In general, small businesses continued to reduce employment during the quarter, with a net 13 per cent of companies reducing employment. However, this was lower than the 22 per cent that cut jobs in the third quarter, and was the lowest number of companies letting staff go in more than three years.
SMEs will continue to cut employment in the next 12 months, although fewer firms anticipate letting people go.
Although the domestic market remains depressed, the export market performed more strongly.
Export values were at record levels, the survey claimed, with the net value of exports in the past three months rising 32 per cent. That compared with 16 per cent in the third quarter and outstrips the second quarter's 29 per cent.
Almost half of firms expected to see exports rise in the next 12 months, with only 10 per cent predicting a fall.
