SMEs worried over prospects

The business environment for the SME sector remains challenging with sentiment either stagnating or dipping across a number of important indicators, according to Isme.

In its latest quarterly survey, the lobby group for small businesses found that SMEs are less optimistic now about the prospects for the economy than they were over the last three months of 2013.

“The Government and big business lobby PR machine has been in overdrive in recent months telling us all that the storm has passed,” said Isme chief executive Mark Fielding.

“It is important that we temper our enthusiasm, manage our expectations and do not get complacent at this point as current signs of recovery are tentative, to say the least and must be protected.”

The survey was conducted in the last week of March, with 1,050 SME respondents. Some 42% employ fewer than 10, 46% employ 11-50, and the remaining 12% employ between 51 and 250.

In the current quarter, sales have remained static at +11%, while exports and employment have reduced by 2 and 7 points respectively, though still remaining positive.

Looking out over the next six months, employment is static at +18, with just a one-point gain in future sales, while exports show a drop of 10 points.

Isme called on the Government to reduce state-controlled business costs to below the EU average and ensure there is an adequate supply of credit for SMEs.

“It is of the utmost importance that the fragile revival in the economy is nurtured and that there is a continued acceptance that there is still a long way to go. Businesses are not recovering at the rate that reports and rhetoric would have us believe,” Mr Fielding said.

“It will take a lot more time and sustained effort before we can truly put the effects of the recession behind us. The economic realities of Ireland post-troika must be understood and Government, employers, and employees must be prudent, productive, and continue to work on the economic revival.”