International trade remains down the list of priorities for the small and medium businesses sector this year, with only 5 per cent saying they will start exporting to international markets and 9 per cent importing materials for the first time, according to a new survey.
However, the Bank of Ireland business banking survey of 1,000 small and medium businesses revealed continued optimism within the SME sector for the coming year.
One in 10 small business owners intends selling their business in 2007, with a further 8 per cent planning to retire and hand over to a family member.
A total of 41 per cent of companies surveyed said they would recruit extra staff in the coming year. Of this number 19 per cent will hire foreign national employees for the first time, with the business service and construction sectors the most likely to recruit from this segment.
The continued buoyancy in the Irish employment market was highlighted by the fact that human resources costs were cited by around a quarter of SMEs as a major business cost for 2007.
A total of 28 per cent of those questioned pointed to energy costs as the most significant business cost increase for the coming year.
Around 14 per cent of businesses owners within the category intend purchasing their business premises, pointing to continued confidence in the commercial property market.
Of the half of business owners survey who hold an SSIA, the largest proportion - 16 per cent - intend investing in property in 2007, while only 4 per cent will invest in stocks and equities.
Some 15 per cent of those surveyed feel they are significantly overworked, working 60-plus hours a week, while one-third of respondents rate unnecessary telephone calls as the biggest waste of time during their working day followed by their daily commute to work.
The most admired Irish business person among SMEs is Michael O'Leary (37 per cent), followed by entrepreneur Seán Quinn (4 per cent).
The survey said SMEs will face a number of challenges in the next 12 months.
"Our economy continues to be structurally very sound. However, this survey does point to some of the emerging challenges Irish SMEs will be facing over the coming 24 months, such as the tightening labour market and increasing labour costs, the excessive increase in the minimum wage, rising energy costs, increasing legislation and local authority charging," said Patricia Callan, director of the Small Firms Association.
"Moving to a higher-cost economy needs to be matched by higher productivity and lower input costs to ensure our economic success into the next decade."
