Irish SMEs expect economic climate to worsen this year

Small firms report pressure due to surging costs but also the difficulties they face in recruiting staff, according to Azets

Azets Ireland CEO Neil Hughes: 'It’s clear from our latest survey that inflation is proving to be a significant challenge for SMEs...' File picture

Irish small businesses are facing hits from a surge in costs and the huge rise in interest rates and expect business conditions to worsen as the year goes on, according to a leading accounting adviser to SMEs.

Azets Ireland — which was formerly known as Baker Tilly before its takeover and renaming — said its major survey of small businesses also showed firms were facing difficulties in recruiting staff.

And the survey found many small firms were “expecting the economic climate to worsen” later this year, while about a third of small firms expect to cut jobs should economic conditions worsen.

Small businesses will use their own cash and government grants and subsidies to fund projects but need more help to train staff, according to the survey.

“It’s clear from our latest survey that inflation is proving to be a significant challenge for SMEs throughout the country,” Neil Hughes, chief executive at Azets Ireland said.

Every aspect of doing business is becoming more expensive and rising prices are putting a squeeze on already tight operating margins.

Most small Irish firms forecast revenues and profits will be unchanged this year, according to the survey that involved replies from 211 small business leaders.