Business confidence grows in spite of challenges

The KPMG Enterprise Barometer found a big jump in confidence in growth because of increased demand for products and services

Head of private enterprise at KPMG Ireland, Niall Savage, said despite ongoing 'tariff uncertainties and escalating costs' the businesses surveyed 'exhibit remarkable confidence and optimism, with 79% expressing growth prospects'.

Despite tariffs, increasing costs, and recruitment challenges, nearly four in five Irish businesses are confident about their growth prospects for the coming year, the latest KPMG Enterprise Barometer shows.

According to the report, 79% of businesses are confident in their prospects for business growth, compared to 72% at the start of the year, while 79% are confident in business growth because of increased demand for products and services which is a significant rise from the 45% recorded in January.

It found 71% expect turnover to grow in the next 12 months.

Other factors contributing to this confidence include plans to enter new markets or launch new products, cited by 57%, and the introduction of new technologies, 36%.

Head of private enterprise at KPMG Ireland, Niall Savage, said despite ongoing “tariff uncertainties and escalating costs” the businesses surveyed “exhibit remarkable confidence and optimism, with 79% expressing growth prospects”.

“Understanding their aspirations and challenges is essential for shaping effective policies that nurture this vital sector and secure a prosperous future for entrepreneurship in Ireland,” he said.

Businesses did highlight a number of areas where they are experiencing challenges. Increasing labour costs was cited by 75% of businesses as the most significant business challenge this year.

KPMG said this is compounded by "severe recruitment and retention difficulties”, cited by 55%, and intense competition for skilled workers from multinationals, cited by 49%, adding further strain to businesses.

Of the companies surveyed, 38% say workforce and skills is their main priority for investment, down from 44% at the start of the year, followed by 26% for innovation.

The vast majority of company founders, 83%, said they are focused on growing their business rather than selling it.

“While over a third, 35%, of respondents acknowledge the Irish Government's active support for entrepreneurship as a driver of economic growth, this positive sentiment does not yet fully translate into confidence in specific policy effectiveness,” KPMG said.

Only 25% of those surveyed feel Government measures are currently effective in encouraging domestic businesses and entrepreneurs to continue operations rather than selling them.

This research, conducted by Red C Research on behalf of KPMG, surveyed over 100 key decision-makers from private businesses and entrepreneurs each employing between seven and 100 people across various sectors.