Survey: Competitiveness key to economic recovery

Almost three out of every five (58%) of businesses in Ireland and the North reported a drop in turnover in the second quarter of 2009, according to the results of a new survey released today.

The InterTradeIreland Quarterly Business Monitor, the biggest business survey on the island of Ireland, however said trends for business outcomes and expectations indicated that the bottom of the economic downturn may have been reached.

“The emerging picture points to a U-shaped recession - the question now is how wide the trough will be," InterTradeIreland’s Director of Strategy Aidan Gough said.

"According to our survey results, the answer may lie in the actions companies have been taking to restore lost competitiveness.

“Almost half of companies (49%) have revised targets downwards, 56% have renegotiated professional or supplier costs, and 58% have sought to reduce staff costs in the last quarter.

"In addition, just over two in five businesses (41%) overall have reduced their prices - a much higher proportion in the South (60%) than in the North (22%).

“Restoring competitiveness is the biggest challenge facing firms and they are currently seeking to reduce costs across the board in order to be able to take advantage of any upswing.”

The survey also indicated that southern companies are continuing to suffer more than their counterparts in the North, reporting a drop in turnover of 72% compared to 44%.

The sectors worst affected are manufacturing, construction and the hospitality industry.

The survey, undertaken last month, polled 1,000 business owner/managers North and South and covers the period April to June 2009.