Small firms ‘feeling more positive’

SMALL firms are feeling more positive about the business environment than this time last year but they said the Government must do more to help.

A survey conducted by the Small Firms Association (SFA) found a fifth of companies rate the overall business environment to be either “very good” or “good”, an increase of 6% on the previous quarter and a 12% increase on quarter three of 2009.

Almost three in 10 companies expect their business to be “very good” or “good” in three months representing an increase of 10% on this time last year.

However, half of respondents still rate the business environment as “poor” or “very poor”, a drop of 9% on the second quarter of 2010 and a drop of 17% when compared to 12 months ago.

SFA director Avine McNally said sentiment levels for the current business environment have improved in this quarter and markedly so when compared to this time last year.

“However, confidence is weak among owner-managers and there are still challenges which they face,” she said.

More than three in 10 companies rate their own business as “very good” or “good”, an increase of 5% on the previous quarter.

In relation to assessment of their business on a sectoral basis, just over a third of companies from the manufacturing sector rate their own business currently as either “very good” or “good”, slightly higher than services.

When compared over the 12-month period, companies are indicating a more positive outlook for the forthcoming months.

Access to credit continues to be challenging, with the cost of working capital having increased for a fifth of respondent companies in the last three months.

“This survey shows that small business sentiment has improved, however their confidence remains weak and will remain so until greater clarity and certainty is provided by government in regard to the economy and content of budget 2011.

“Government needs to ensure that they assist small firms build on this positive sentiment by creating a business environment conducive to small business survival and growth. They must put jobs and enterprise centre stage,” said Ms McNally.

The SFA said the Government can ensure all government agencies pay their own bills to small businesses within 10 days, including local authorities and the HSE, which it said will assist small businesses with their cashflow.

The survey was conducted in September and a total of 636 companies employing 13,750 people responded.


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