Businesses on both sides of the border are moving into challenging times from a position of relative strength with similar issues faced by firms in Northern Ireland and the Republic of Ireland. However, the number of companies across the island reporting stability or growth in the last quarter has remained fairly constant at 84 per cent. Exporters continue to fare better than non-exporters with 51 per cent experiencing growth compared to 36 per cent respectively.
Challenges lie in sourcing skilled labour
Over a third of companies in the construction sector (37 per cent) are reporting difficulties recruiting skilled labour, with 33 per cent citing a lack of appropriate skills in their current workforce. This emerging skills shortage within the industry is an obstacle to continued growth and may lead to building firms beginning to feel the pinch in terms of the acquisition of new contracts and servicing the needs of fuller order books.
This echoes sentiments from January’s statements from the Construction Employers Federation in Northern Ireland and also those of the Construction Industry Federation in Ireland, outlined in its ’Skills in Construction to 2020’ report.
Resurgence in construction sector
However, there are robust signs of resurgence in the sector with 82 per cent of firms confirming they are stable or in growth mode and more than 75 per cent of construction businesses saying they are profitable or very profitable.
Companies across various sectors island-wide are experiencing similar challenges to those in the construction sector which includes increased competition, discounting by competitors and difficulties in finding skilled labour as companies grow; however many are showing signs of a healthy economy. The greatest reported challenge facing businesses is rising costs, particularly energy costs.
Positive signs of economic buoyancy are evident in the employment figures reported in the Business Monitor, which showed a large increase in the number of firms reporting an upsurge in employment levels (14 per cent) – the highest number in recent years, with larger firms experiencing a higher rate of growth at 54 per cent.
With almost a third of firms, North and South, reporting that they are running at break-even and 78 per cent already running close to or at capacity, there is a vulnerable tier of the economy that could be exposed to inflationary pressures. Nevertheless, the overall message is that of a robust economy, with companies going into potentially difficult times from a more solid standpoint.
About InterTradeIreland’s Business Monitor
InterTradeIreland’s quarterly Business Monitor survey 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.
For more information on InterTradeIreland and its business support programmes, please visit www.intertradeireland.com. A copy of the 2016 Q4 InterTradeIreland Business Monitor Executive Summary can be viewed here.