SMEs plan to invest in marketing

Nearly 70% of SMEs have plans to invest in their business over the coming 12 months, but concern remains regarding their focus on export opportunities.

The latest quarterly business monitor from cross-border enterprise body, InterTrade Ireland shows that 69% of SMEs on the island of Ireland plan to invest in their business over the next year, with increased marketing activity their main priority.

While 50% of respondents said they intend to up their marketing spend, 32% said they would be investing more in staff training; something being viewed as “encouraging” by the Newry-based body.

“In 2008, when the recession began in Ireland, investment in these activities was the first to be cut. Investing in marketing and staff training reflects a change in business focus towards strategies for growth, at a time when many firms are expressing cautious optimism about the future,” according to Dr Eoin Magennis, economist and policy research manager at InterTrade Ireland.

The latest survey shows that 37% of SMEs saw a sales increase during the second quarter of the year and that 11% of firms reported staff increases; the highest level for five years. It added that the firms most likely to invest in the coming year were either manufacturing companies and/or export-orientated firms.

However, InterTrade Ireland has also struck some notes of caution. It said that the percentage of SMEs in growth mode slipped from 37% in the first quarter of this year to 29% in the second quarter.

Companies remain worried about cost inflation, cash flow and late payments; and more needs to be done to promote export opportunities.

According to the monitor, 82% of surveyed firms aren’t currently exporting, even though nearly one-in-five have a product or service suitable for export.

Dr Magennis said this shows that more support is needed to boost SME export levels.

“Given that we see exporters consistently outperforming domestically-focused businesses, it is vital that we ensure that any potential exporter is encouraged and supported.

“The findings highlight that the majority of those that are exporting have been doing so for five years or more; we now need more first-time SMEs looking to other markets,” he said.