Business growth

Irish business growth slows as rising costs increase pressure

Business growth in Ireland is starting to slow as rising costs put pressure on the economy, according to a new survey.

The latest InterTradeIreland Business Monitor reveals that while Irish corporate sales and earnings remain relatively buoyant, a slowdown in growth is looming quarter on quarter.

Energy and rising costs of other overheads are major concerns for small and medium-sized businesses. The survey shows the impact has been particularly acute for manufacturing, with more than 20% now indicating they are contracting.

However, no sector is immune – more than a fifth of companies expect their sales to fall over the next six months. This rises to 41% of companies in the leisure, hotel and restaurant sectors.

Martin Robinson, chief strategy officer of InterTradeIreland, said the latest activity monitor showed the impact of uncertainty on the wider economy.

“The road ahead appears to have a number of warning signs for businesses,” he said. “While the majority of the companies we speak with are in a stable position, the number in growth mode has dropped to just over a third, from 41% for the same period last year.”

He added: “Our data shows us that 90% of businesses experienced a significant increase in their energy costs, and that almost half of them experienced a large increase in supplier costs, while 44% experienced a substantial increase in their energy costs. transportation costs.”

“When it comes to Brexit, 27% of companies reported it as an issue this quarter, compared to 35% of companies in the previous quarter. Half of companies say they have adapted completely or to a large extent to the changes. caused by Brexit.”

Company

Irish businesses remain more confident than Europe…

According to the survey, 73% of businesses have passed on price increases to their customers over the past 12 months and profitability remains stable. The companies also report that cost increases have yet to impact business and consumer confidence quarter over quarter.

However, it remains to be seen what will happen if companies continue to pass on price increases, as nine out of 10 companies expect rising costs of doing business to continue over the next 12 months.

The survey of 750 business leaders across Ireland and Northern Ireland was conducted by telephone between September 14 and October 14.