A THIRD of companies are expecting to cut jobs over the next few months with well over half of construction firms planning to lay off workers.
According to the latest survey from small business group, ISME, just over one in 10 firms are planning to increase employment in the coming months.
Despite the high number of firms looking to cut jobs, small firms are shedding jobs at a slower pace than this time last year. One in two companies expect a deterioration in business conditions over the next 12 months and two thirds said the current economic environment is threatening their viability.
The retail sector is the least confident with a half of companies less optimistic about business prospects compared to one in four manufacturing firms.
Head of research at ISME Jim Curran said: “The results of the latest quarterly survey confirm that the SME sector is extremely concerned at the direction of the economy, with a dramatic reduction in business optimism and little confidence in the overall business environment. This is primarily as a consequence of huge uncertainty and a continuing deterioration in business conditions.
“This uncertainty is having a negative impact on investment decisions and is continuing to have a knock-on effect on the jobs market, which continues to contract. The only area that has shown any improvement is export values.”
ISME said the results of the survey conducted among 500 companies are “extremely worrying”.
ISME said the only positive indication is that export values are continuing to increase, maintaining a trend going back 18 months.
Two thirds of firms said that sales are down, similar to the previous quarter but a third expect to increase sales in the coming months.
Company investment levels remain static with only 1% of companies increasing investment, down slightly from the net 2% in the previous quarter. More than half of respondents said that the credit period being taken is longer, with just 8% stating that they get paid faster. The survey said that 43% of companies have to wait 90 days or more to be paid.
“There was a certain level of momentum in the economy before the summer months, but that momentum has failed to be maintained over the last quarter,” he said.
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