Small Business all over Ireland Optimistic for Year Ahead Ulster Bank survey finds businesses confident overall but clear regional differences emerge
22 June 2007
In the first all-island survey among businesses with up to 100 employees, over 50% of companies in the Republic of Ireland expect their business prospects to improve in the year ahead and a further 30% believe their business performance will remain the same. The 'Ulster Bank Business Confidence Survey' carried out by independent researchers Amarach Consulting in April 2007, assessed how businesses felt their company performed in the last year and how they felt about the year ahead.
Business Outlook
In the Republic of Ireland, of the 5 in 10 companies expecting to achieve a stronger performance in the next year, over 20% expect this to be fuelled by more orders and enquiries, with a further 20% planning on expansion to deliver the expected stronger performance. Only 15% of businesses believe their operation will not perform as well in the year ahead and 45% of these said their main concern was competition. Among this group 2 in 10 cited the economy and interest rates as their main concern.
Northern Ireland businesses were significantly more optimistic, with 63% of companies believing their business prospects will improve in the next year. A further 25% expect prospects to stay the same, and a total of 8% expect prospects to worsen.
At a regional level, business confidence varied, reflecting the different challenges faced by businesses, for example in accessing infrastructure and in attracting employees.
Businesses in the Border counties of Donegal, Leitrim, Louth, Cavan and Monaghan and in the Mid-East counties of Kildare, Meath and Wicklow, are the most optimistic in believing their prospects for the year ahead will improve. In contrast, the South-East counties of Carlow, Kilkenny, Tipperary South, Waterford and Wexford have the least positive business outlook, however still mainly optimistic.
Growth Strategy
Over 70% of businesses, both north and south, expect to grow their business in the next two to three years. In the south, 39% plan to grow by introducing new products and services to their company's offering, 38% plan to grow by increasing turnover and sales within their existing market and product portfolio, while 29% plan on entering new markets. In the north, over 50% expect to increase turnover and sales within their existing market and product portfolio, with only 21% planning a move into new markets. Just over 30% intend to introduce new products or services.
Reflecting the predominance of a service economy, over 50% of companies will need to hire more staff in order to achieve this growth. Expansion of premises and adding more sites was the second highest requirement, with 34% of companies in the south identifying this as a need and 43% of companies in the north.
Funding Growth
In order to fund this growth, a majority of companies both north (50%) and south (44%), state their preference is to use internal finance only, with a quarter across the island planning to use a mix of internal and external finance. Just over 25% in the south expect to rely on external finance only, in comparison to just under 20% in the north.
Regional Findings
The key differences in the results of the survey emerge at a regional level. The survey respondents were chosen from across the eight European Union NUTS 3 regions, comprising the Border; Midland; West; Dublin; Mid-East; Mid-West; South-East and South-West regional authorities. Northern Ireland was also included.
Businesses in the Mid-East region - Kildare, Meath and Wicklow display the highest level of confidence about their current and future performance, while businesses in the South East and in the West of Ireland are the least confident compared with this time last year. Companies in the Midlands region - Laois, Offaly, Westmeath, indicate the highest level of employment growth over the last year, followed closely by the Border region, Dublin and the MidWest.
Robert Gallagher, Chief Executive of Ulster Bank Corporate Markets, says that the survey provides an indication of how small companies and medium sized businesses feel and reveals a great sense of optimism about future expansion. "The Irish economy relies heavily on these businesses particularly outside the major urban centres. This survey provides a very revealing insight into the positive perceptions of business owners' and entrepreneurs for the future prospects of their organisations."
"In recent years we have witnessed significant economic growth across Ireland though not always evenly spread. This survey is uniquely designed to gauge the temperature of businesses across all the regions. No business will progress without learning and developing and our survey shows a healthy appetite among the small business community to do this. Companies south of the border will be striving for growth by entering new markets and introducing new services while companies north of the border plan to grow by increasing their sales to their existing market. Overall we can see a clear picture that businesses intend to hire more staff and to continue to grow."
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Notes to Editors
The Ulster Bank Business Confidence survey was conducted in April 2007. A total of 937 telephone interviews was conducted with business owners or business managers of companies with up to 100 employees. Regional quotas were imposed in order to ensure sufficient sample within all 9 regions.
The survey was conducted by independent researcher Amarach Consulting.