Firms finding it difficult to sustain growth, survey finds 

Businesses said rising costs, particularly energy costs, labour pressures and growing uncertainty are making it harder for businesses to sustain growth

Assistant director of strategy at InterTradeIreland Anne-Marie Murphy.

Businesses north and south of the border are finding it harder to sustain growth, despite stable demand conditions, as labour and energy costs continue to rise, a new report from InterTradeIreland has found.

According to the agency’s latest All-Island Business Monitor, 55% of firms surveyed are reporting stable trading conditions, with 39% reporting growth. About six in 10 of those firms are profitable.

However, businesses also said rising costs, labour pressures and growing uncertainty are making it harder for businesses to sustain growth.

Assistant director of strategy for InterTradeIreland Anne-Marie Murphy said “while we have seen modest growth in both business performance and sales this quarter, achieving growth is becoming increasingly challenging”.

The report found 56% of small- and medium-sized enterprises (SMEs) cited rising energy costs as their biggest challenge, followed by rising costs of other overheads — including cost of supplies, insurance and transport — which was cited by 32% of firms.

Of those that cited energy costs as an issue, 86% report electricity costs are weighing them down, while 58% point to other fuels, and 34% cite gas costs as an issue.

According to InterTradeIreland, the energy pressures are particularly acute in construction, hospitality and manufacturing.

“However, energy pressures are prevalent across all sectors and company size, suggesting energy costs are affecting businesses well beyond traditionally energy-intensive sectors,” the agency said.

The rising cost of supplies/consumables was the most prominent concern for businesses when it came to the rising cost of overheads, followed closely by insurance costs.

Staffing costs and recruitment difficulties was cited by 31%, while 22% reported difficulty in recruiting people.

During the final quarter of last year, about 50% of firms said these issues were “not at all” having an impact on their growth. Between January and March this year, that has dropped to 34%.

There was one bright spot the agency noted and that was businesses that trade externally are outperforming their peers.

“SMEs with cross-border sales report improved business performance and sales in quarter one 2026 and are more likely to be profitable, demonstrating the importance of market diversification,” the agency said.

Every quarter, the survey asks 750 SMEs, north and south of the border, about their business performance, sales, challenges and profitability.