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Two thirds of firms plan to invest

Monday, August 18 10:17:01

Over two thirds (69pc) of firms say they plan to invest in their businesses over the next year while the hiring intentions of business owners and managers remains at its best since 2009.

Figures from the InterTradeIreland Business Monitor for the second quarter of this year also reveal that firms who plan to increase marketing activity topped the poll at 50pc, followed by investment in staff training (32pc).

Manufacturing firms and those exporting are the most likely to invest over the next year, according to the survey.

It also found that 37pc of businesses reported an increase in sales this quarter, this percentage was higher in exporting companies (55pc).

The number of companies reporting staff increases remains the highest since 2009 with 11pc of firms reporting an increase in staff.

Commenting on these findings, Dr Eoin Magennis, Economist and Policy Research Manager at InterTradeIreland said: "It is encouraging to see such a significant percentage of firms planning to invest and in particular that they are looking to invest in marketing and staff training. In 2008 when the recession began in Ireland, investment in these activities was the first to be cut. Investing in marketing and staff training reflects a change in business focus towards strategies for growth at a time when many firms are expressing cautious optimism about the future."

Despite signs of a broad-based recovery across the island continued to emerge in the second quarter of this year, with positive sales and employment performance across all sectors, there is a significant drop in the number of firms in growth mode this quarter falling to 29pc from 37pc in Q1.

According to Dr Magennis, "Although the growth figures are much stronger than 12 months ago, the dip in the number of firms experiencing growth this quarter aligns with findings from other economic surveys. This could be related to external factors, such as weak growth in the Eurozone market, or to the increased speculation about a rise in interest rates. Businesses also remain concerned about cost inflation and the linked and growing issues of cashflow and late payments."

The Q2 2014 Business Monitor also found that 82pc of firms surveyed are not currently exporting. However, it was also revealed that almost one in five businesses (19pc) have a product or service suitable for export but don't sell across the border or further afield. Firms reported that the main challenges to export cross-border and off-island were: a lack of time or management resources (26pc), the perceived cost associated with entry to new markets (24pc) as well as lack of internal financial resources (21pc) and a lack of awareness of available support (17pc).

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