Business confidence rising despite credit problems

Confidence among small businesses is rising despite access to finance being a major challenge, it emerged today.

The Small Firms Association (SFA) said a fifth of companies report day to day running costs crept up over the last three months, while the availability of working capital from the banks dropped.

Avine McNally, SFA director, said its autumn business sentiment survey showed sentiment increased over the last 12 months, but stressed confidence remains weak among owner-managers.

Bosses at a third of companies rated their own business as very good or good, while another third deemed it poor or very poor, a 20% drop on last year.

Ms McNally revealed a fifth also indicated they were more confident about their own business, 3% up on this time last year.

“While the figures show sentiment improving for small firms, they still face many challenges – Government need to assist by providing clarity about budgetary impacts,” she added.

A total of 636 companies employing 13,750 people nationwide responded to the survey in the manufacturing, distribution, retail and services sectors.

It revealed half of respondents rated the overall business environment as poor or very poor, a 17% drop from last year.

But almost three in ten companies – 29% – expect their business to be very good or good over the next three months.

Ms McNally said confidence will remain so until greater clarity and certainty is provided by Government in regard to the economy and content of budget 2011.

The SFA called on all Government agencies to pay their own bills to small businesses within ten days, for a reduction of employers’ PRSI, and action to tackle excessive cost-bases.

She added: “Government needs to ensure that they assist small firms build on this positive sentiment by creating a business environment conducive to small business survival and growth.

“They must put jobs and enterprise centre stage.”

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