Businesses confident of surviving recession

Recession on both sides of the border has done little to dent the optimism and self-belief of the majority of businesses in either jurisdiction, it was revealed today.

Despite the economic downturn having an adverse impact on four in five companies across the island of Ireland, company bosses remain confident in their ability to survive, according to a survey commissioned by trade and business development body InterTradeIreland.

The All Island Business Monitor study carried out among 1,000 companies over the last quarter of 2008 revealed the severity of the impact of the recession was higher among small and medium sized enterprises – with businesses in the south particularly hard hit.

The two biggest problems facing businesses were cashflow (68%) and a fall-off in demand for goods and service (66%).

In fact almost nine in 10 (87%) of businesses had noticed a tightening of expenditure by their customers over recent months.

Some 53% of businesses reported a decline in their turnover – 61% south and 44% north – and was most prevalent in the construction and retail/distribution sectors.

The south was worst for redundancy, with one in three shedding staff compared with 19% in the north – an overall figure of 25%.

Despite all the problems InterTradeIreland chief executive Liam Nellis said the majority of businesses surveyed remained hopeful about their business performance over the next three years.

“Perhaps surprisingly 75% of businesses were still optimistic which demonstrates a degree of self-belief in their ability to survive the downturn,” he said.

However he added: “They are realistic and have cited the need for advice on access to finance, managing their cashflow and speeding up payments.

“Managers want to learn how to become more efficient in areas such as energy, waste and transport. They also expressed a desire for information on new potential cross-border opportunities with 67% stating they wanted to see more co-operation between both parts of the island in the future.”

In terms of actions that government could take to help business during the downturn, over a quarter cited the need for borrowing to be made easier (27%), reduced levels of VAT (9%), reduced taxation or tax concessions (7%), help to increase consumer confidence (7%), assistance for small business and SMEs (7%), as well as financial assistance for struggling businesses (6%).

Mr Nellis urged businesses to take advantage of the help available from InterTradeIreland.

He said: “We want to encourage businesses across the island to take advantage of our wide range of practical advice and programmes to help them access and reduce the risk when entering new markets, to become more competitive by sharing knowledge and expertise and, for fledgling companies, to raise venture capital.”