Latest InterTradeIreland Business Monitor Shows That ‘Business is Holding Its Breath’

Aidan-Gough-in-Library-2017

Indications of a ‘collective pause’

The majority of firms across the island remain very stable, according to the latest quarterly InterTradeIreland Business Monitor Report (January-March 2018). However, levels of growth are declining sharply in Ireland across companies both large and small. While this is not a cause for concern, it could indicate that we are entering a critical phase of the economic cycle, with businesses taking a collective pause on key decisions.

 

Wait and see attitude

It appears that the movement from growth to stability is almost entirely a phenomenon in the South, with a lot of businesses now adopting a ‘wait and see’ attitude. Many companies are working at full capacity (53%) and 55% of businesses are profitable. While this, at face value is positive, there are underlying indications that a transition is afoot.

 

Consumer confidence a concern

In Ireland and Northern Ireland, few firms are hiring extra staff or making investment decisions and business and consumer confidence is increasing as a concern across all industries.

 

Construction feeling the pinch

Construction is feeling the pinch currently, with a significant drop in those in a growth position, falling from 42% last quarter to 16% this quarter. More than one in five in the sector are operating below capacity and only 4% are reporting an increase in sales.

 

Business across the island is holding its breath as we are at a crossroads

The number of businesses reporting to be in stability mode is at the highest level since InterTradeIreland began recording business position in 2011. Conversely companies in growth mode are at the lowest mark since 2009. Firms are operating against a backdrop of increasing pressure on the high street, the spectre of inflation, salary increases and uncertainty around Brexit, making it understandable that many businesses at this juncture may be feeling hesitant.

 

Staffing likely to come under the spotlight as Brexit approaches

With hiring flat, staffing is likely to further come into the spotlight with the impending Brexit. 13% of businesses with cross-border sales have staff in the opposite jurisdiction and 15% of those in the leisure industry in Northern Ireland have staff from the rest of the EU (outside of the UK and Ireland).

 

Exporters already feeling the impacts from Brexit

Exporters and those with cross-border sales are indicating they will be most impacted by Brexit, with 21% already seeing a negative impact. In general, the level of preparedness for business around Brexit has improved but continues to be low, with just 8% of cross-border traders having a plan in place for Brexit.

 

InterTardeIreland Brexit Advisory Service

InterTradeIreland’s Brexit Advisory Service offers bespoke help and assistance for SMEs, including a €2,000 Brexit Start Planning Voucher, which allows individual firms to work with an approved panel of experts to devise a tailored action plan.

 

GDPR changes planned for by more than half of firms on the island

55% of companies across the island are prepared for the changes to GDPR, which will come into force on May 25 and is perhaps indicative of the importance of certainty in planning decisions.

 

About Business Monitor

InterTradeIreland’s quarterly Business Monitor is the largest and most comprehensive business survey on the island and is based on the views of more than 750 business managers across Northern Ireland and Ireland since 2008. Business Monitor differs from other surveys in that it is seen to be the ‘voice of local businesses’ feeding directly from telephone interviews conducted with firms of all sizes from across a range of sectors to track all-island economic indicators such as sales, employment, business outlook and other specific topical research areas on a quarter by quarter basis. A copy of the 2018 Q1 InterTradeIreland Business Monitor Executive Summary can be viewed here.

 

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Tuesday, 23 October 2018
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