A third of Irish SME's suffered bad debt over the last year with €13,780 being the average amount written off, according to new research from Bibby Financial Services Ireland.
According to the report, nearly two thirds (64%) of Irish SME’s cited rising overheads/costs as the greatest challenge to their business right now and they also cited this as their greatest challenge in the next 12 months (62%).
When asked which area is the most problematic in managing their business cashflow, over half (57%) of SME’s cited collecting payment from customers on time. Nearly half (49%) of respondents believe that an increase in interest rates will hinder their business growth, compared to 37% who don’t expect their business to be affected.
The Global Business Monitor, produced by Bibby Financial Services, is an international survey of over 1,200 small and medium sized enterprises across eleven countries: Ireland, UK, US, Canada, Hong Kong, Singapore, Czech Republic, Poland, France, Germany and the Netherlands.
It finds that 97% of Irish SME’s are planning to invest in their businesses over the next 12 months. Much of this investment will focus on up-skilling existing staff (77%), sales and marketing (63%), IT and digital technology (63%) and recruitment (60%). Only 3% of respondents stated that they do not intend to invest at all.
The report indicates that Irish SME’s appear more confident in the strength of the domestic economy than the global economy, with over two-thirds (67%) of those surveyed describing the Irish economy as performing well. SME’s in the hospitality and leisure (73%) sectors are most positive about the economy citing an increase in sales over the last 12 months, while SME’s in the transportation industry say sales have remained the same (56%).
Industries citing a decline in business performance over the past 12 months are mainly business services and manufacturing (21% and 22% respectively). SME’s in the wholesale and distribution industry are most pessimistic about the future, with 24% saying it will worsen over the next 12 months.
Sixty nine percent view of Irish respondents view Brexit as the top threat to global economic growth amongst Irish SME’s in 2017, followed by political uncertainty in the U.S. (55%) and global conflict or terrorism (21%).
However, despite considerable uncertainty surrounding the final outcome of negotiations between the UK and the EU, as well as potential changes to U.S. tax and trade policies, 92% of respondents are confident that the Irish economy will stay the same or improve over the next 12 months.
Head of Business at Bibby Financial Services Ireland, Mark O’Rourke says, "All economic indicators point to a strong economy and one that is primed for additional growth throughout the remainder of 2017 and 2018, whatever challenges are encountered. In the face of global economic and political uncertainty, Ireland remains a stable, competitive and pro-business economy."
He added, "In terms of the economic outlook, primary risks to the Irish recovery are external. In particular, Brexit will have an, as yet, unknown long-term impact. For the moment, the main impact is via the value of sterling. At the same time, there are positive developments externally, with the global economy, including the Eurozone, picking up momentum, which in turn is likely to boost Irish exports."