Survey Says Downturn Hitting 80% Of Irish Businesses

The economic downturn has had an adverse impact on four out of five businesses across the island of Ireland.

That is the stark finding from an extensive survey of 1,000 companies, north and south of the border commissioned by trade and business development body InterTradeIreland.

The research was undertaken last month by Millward Brown and covers the period October to December 2008.

Nevertheless, according to InterTradeIreland Chief Executive Liam Nellis (pictured here) the majority of businesses surveyed remain hopeful about their business performance over the next three years.

"Perhaps surprisingly 75% of businesses were still optimistic which demonstrates a degree of self-belief in their ability to survive the downturn," he said. "However, they are realistic and have cited the need for advice on access to finance, managing their cash flow and speeding up payments.

"Managers want to learn how to become more efficient in areas such as energy, waste and transport. They also expressed a desire for information on new potential cross-border opportunities with 67% stating they wanted to see more co-operation between both parts of the island in the future."

The All-island Business Monitor survey reveals that the severity of the impact was higher among small and medium sized enterprises, with businesses in the south particularly hard hit.

The two biggest problems facing businesses are cash flow (68%) and a fall-off in demand for goods and services (66%).

In fact, almost nine in 10 (87%) businesses had noticed a tightening of expenditure by their customers over recent months.

Fifty-three per cent of businesses reported a decline in their turnover. This was higher in the south than in the north (61% v 44%) and was most prevalent in the construction and retail/distribution sectors.

Twenty-five per cent of businesses across the island reported that they had reduced their workforce, a trend that was higher in the south where one in three businesses shed staff compared to 19% in the north.

In terms of actions that governments can take to help business during the downturn, over a quarter spontaneously cited the need for borrowing to be made easier (27%), reduced levels of VAT (9%), reduced taxation or tax concessions (7%), help to increase consumer confidence (7%), assistance for small business and SMEs (7%), as well as financial assistance for struggling businesses (6%).

Mr Nellis urged businesses to take advantage of the help available from InterTradeIreland. He said: "We want to encourage businesses across the island to take advantage of our wide range of practical advice and programmes to help them access and reduce the risk when entering new markets, to become more competitive by sharing knowledge and expertise and, for fledging companies, to raise venture capital."

See: www.intertradeireland.com/index.cfm/area/information/page/Business%20Monitor

(BMcC/JM)