Isme business survey reports sharp rise in business confidence
Isme chief executive Neil McDonnell. Picture: Sasko Lazarov
Business confidence among small and medium-sized businesses has surged, according to the latest survey by representative body Isme.
This survey was conducted in the second week of March, with 233 businesses responding. It shows business confidence rose massively by 39% compared to a 33% fall in the fourth quarter of last year.
Other indicators in the quarterly trends survey that increased included profitability expectations, which rose by 15% and sales expectations, which swung from -10% to +28%.
Also yesterday, Isme published its quarterly Bank Watch survey, that shows loan refusal rates at similar levels in the first quarter of 2021 compared to the final three months of last year.
Demand for credit increased from 11% to 29%, with half of the respondents saying waiting times from decision to drawdown is between one and three weeks.
According to the survey, 22% of businesses had applied for the SBCI Future Growth Loan Scheme, with 95% approved. Of those approved, 45% received approval from their bank. A further 9% of those surveyed had applied for the SBCI SME Credit Guarantee Scheme, with 71% approved. Of those, 29% received approval from their bank.
Isme chief executive Neil McDonnell said: “There is an interesting contrast evident between the success of the SBCI Future Growth Loan Scheme and the SBCI SME Credit Guarantee Scheme.
"The former is more than twice as popular with SME borrowers than the latter, which may be down to the longer terms of loans available.
"Bank approvals of the Future Growth Loan Scheme are also significantly higher than those for the Credit Guarantee Scheme.”
Separately, new figures published by the Central Bank confirm that Ireland’s interest rates are the second-highest in the eurozone.
The weighted average interest rate on new Irish mortgage agreements was 2.79% in February, down 12 basis points compared to February 2020. The average for the euro area stood at 1.27% in February, with considerable variance across countries.
The volume of new mortgage agreements amounted to €617m in February, an increase of 7% on February 2020 and a 23% increase compared with January 2021.
Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said the mortgage market has remained robust despite the impact of Covid, and competition has remained strong for fixed-rate mortgages in particular.
"These have long been popular among buyers due to their competitive rates and the certainty they offer in terms of monthly repayments.
"Ireland’s high-interest rates have been a long-standing issue and whilst there are some banking and legal factors currently ensuring they will remain higher than average, there is still work that can and should be done to reduce interest rates overall – considerable savings are still possible on the part of the consumer, particularly when it comes to mortgage holders."
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