InterTradeIreland has released it’s latest quarterly Business Monitor (April – June 2014) and it highlights that, as the all-island recovery continues, the priority for businesses has shifted to investing for growth.
Employment continues to rise
This Quarter’s Business Monitor is once again showing the signs of a broad-based recovery across the island with positive sales and employment performance across all sectors with 11% of firms reporting an increase in staff – the highest level since 2009. This quarter 37% of businesses also reported an uptake in sales, providing an overall positive picture of current performance.
The report also highlighted that two-thirds of firms (69%) plan to invest in their business over the next 12 months, with plans to increase marketing activity topping the poll (50%), followed by investment in staff training (32%). Manufacturing firms and those exporting are the most likely to invest over the next year according to the survey.
Encouraging but cautious outlook
The significant percentage of firms planning to invest may reflect a change in businesses focus towards strategies for growth at a time when many firms are expressing cautious optimism about the future.
The note of caution can be seen in the drop in the number of firms in growth mode this quarter, falling to 30% from 37% in Q1. The fall is much more marked among businesses in Ireland than in Northern Ireland. However, firms across the island are reserved about employment and sales outlook over the next 12 months.
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.
Numbers of exporters needs to rise
The Q2 2014 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 export cross-border and off-island 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%).
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. InterTradeIreland offers a range of supports to tackle some of the resources issues identified by potential exporters as a barrier to taking their first steps along the exporting pathway.
Largest business survey on the island
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. It differs from other surveys in that it is seen to be the ‘voice of local businesses’ feeding directly from telephone interviews conducted with a robust sample of firms of all sizes across a range of sectors to track all-island economic indicators such as sales, employment, business outlook and other specific topical research areas on a quarter by quarter basis.
For more information
For more information on InterTradeIreland and the business support programmes available, please visit www.intertradeireland.com. A copy of the 2014 Q2 InterTradeIreland Business Monitor Executive Summary can be viewed at: www.intertradeireland.com/researchandpublications.