Staff retention and housing remain biggest issues for Mid-West firms despite positive outlook

35% of businesses have cited the ongoing housing crisis as the biggest issue facing the economy, with more than half noting the sustained cost of living crisis. Picture Denis Minihane.

Almost two-thirds of Mid-West businesses have found difficulty attracting and retaining staff, with 65% of firms indicating that sustained skill shortages are fuelling wage inflation.

Publishing its Business Sentiment Survey for summer 2023, Limerick Chamber found that while a number of factors have hindered a more improved economic environment, sentiment across Limerick, Clare and Tipperary remained largely positive.

Across Mid-West firms, recruiting staff and housing shortages remain predominant issues in an employee market, with 59% of businesses expanding their workforce since the start of this year.

According to Limerick Chamber, 48% of businesses expect to expand their workforce in the next six months, which is down significantly since spring last year when 88% of firms reported the same intentions.

Staff shortages

However, as demand for staff outstrips supply, 63% of businesses have admitted difficulties in attracting new hires, with a similar amount attributing staff shortages to rising wage inflation.

To combat the growing gap, many Mid-West businesses have moved to upskill existing employees, with more than a fifth of firms outsourcing staff.

Across the Mid-West, housing remains the biggest barrier to filling job vacancies, followed closely by the availability of childcare.

As a result, 35% of businesses have cited the ongoing housing crisis as the biggest issue facing the economy, with more than half noting the sustained cost of living crisis.

Despite these challenges, Limerick Chamber noted a healthy business position and outlook among most Mid-West firms, with 87% of respondents intending to invest in their businesses over the next six months. 

However, the Chamber noted that the same number of respondents do not intend to apply for business loans in the same period, making the vast majority self-funded when it comes to their investment strategies.

Growing demand

Compared to last year, 46% of firms consider the current level of order volumes and demand to be ahead of last year, however, a quarter of all businesses saw demand fall in the last twelve months.

Despite more businesses working full-time in an office and moving away from a hybrid model, demand for commercial space among Mid-West firms remains unchanged at 63%.

At the same time, 13% of firms require additional industrial space, while just 2% need more retail space which Limerick Chamber said was indicative of the existing commercial vacancy across the Mid-West, which is relatively high in some places.

Despite the introduction of the Temporary Business Energy Support Scheme (TBESS), Mid-West firms have still seen significant price hikes, with almost 40% of businesses seeing energy costs rise by between 11-20%.

In addition, 30% experienced a 21-50% rise in energy costs, with the price of insurance also largely impacting firm finances. However, 70% of businesses still maintain a pragmatic outlook despite anticipating further price hikes in the coming months.