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SMEs Plan Investment As Growth Slows


Over two thirds of businesses in Ireland plan to invest in their business over the next 12 months.


However the number of firms in growth mode has dropped in the second quarter of 2014, according to the latest InterTrade Ireland business monitor.

The monitor for Q2 2014 shows that 69% of businesses north and south of the border plan to invest in their firms, but those describing themselves as in growth mode dropped from 37% in Q1 to 30%.

Other figures from InterTrade Ireland's Q2 report indicate that 37% of businesses in Ireland reported an increase in sales this quarter, while the number of companies reporting staff increases is the highest since 2009 (11%).

Of the businesses planning to invest in their business over the next 12 months, half expect to do so in marketing activity, while 32% will invest in staff training. Manufacturing firms and those exporting are the most likely to invest over the next year, according to the survey.

Commenting on the findings, Dr Eoin Magennis at InterTrade Ireland says: “It is encouraging to see such a significant percentage of firms planning to invest and this may reflect a change in businesses focus towards strategies for growth at a time when many firms are expressing cautious optimism about the future.”

Magennis adds: “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 business monitor also found that 82% of firms surveyed are not currently exporting. However, it was also revealed that almost one in five businesses (19%) 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 cross-border and off-island exporting were: a lack of time or management resources (26%), the perceived cost associated with entry to new markets (24%), as well as lack of internal financial resources (21%) and a lack of awareness of available support (17%).

Says Magennis: “Given that we consistently see exporters significantly outperforming domestically-focused businesses, and that they are very positive about increasing their sales in the next year, it is vital that we ensure that any potential exporter is encouraged and supported.” (August 2014)

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