Nearly half of all firms are struggling to stay solvent as fuel costs rise.
The latest Close Business Barometer revealed that 46% of firms across the country were hit by the increased cost of fuel.
Managing director of Close Brothers Commercial Finance (Ireland), Harry Parkinson, said while there are many problems facing Irish firms, fuel costs are a serious threat.
“From talking to our clients in all sectors, the general consensus is that rising fuel costs remain one of their main concerns on a daily basis.
“This is having a huge impact on operating costs for firms of all sizes, with SMEs in particular being hardest hit,” he said.
Mr Parkinson said that the combination of the weak trading environment and increased costs was forcing companies to hike their prices.
“Bearing in mind that firms are already suffering, having been hit hard by the economic misery of recent years, coupled with consumer confidence being at an all time low, it is not hard to see how increased fuel costs are causing firms a lot of additional pressure, which is ultimately pushing some beyond their limits.”
He said 26% of businesses are being forced to pass some of these costs onto the people they rely on the most — the customer.
“The fact that these increased costs are having to be passed onto customers does nothing to help companies, who are already struggling to survive, attract new business or hold on to current customers.
“When increased operating costs are passed down to customers the knock-on effect on sales can be huge,” said Mr Parkinson.
The problems that firms are facing are being exacerbated by the fact that late payments aren’t being made to firms within the 30 days of the products and services being delivered,
“Our research shows that a staggering 74% of firms cite late payments as a major issue for their business. Of these firms, more than 70% are forced to wait longer than 30 days for payment.
“This cycle quite often puts firms under incredible pressure to make ends meet and balance the books, even when outgoings far outweigh incomings. ” said Mr Parkinson.
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