Bibby: Irish SMEs struggling with rising costs
A new study by Bibby Financial Services has revealed that a large number of Irish businesses are facing rising costs. 49% of SMEs cite this as their greatest challenge against growth - considerably more than the global average of 42%.
15 October 2019 | 0
Small businesses around the world have described rising costs as their greatest challenge, with the problem being particularly acute in Ireland, according to a new study by Bibby Financial Services. 49% of SMEs cited rising costs as a major obstacle to business growth, compared to the global average of 42%. This is according to the latest Global Business Monitor, published by the financial services provider alongside and trade credit insurance provider Euler Hermes.
Irish SMEs are also more likely to be struggling with cashflow than their international competitors, with well over a third (38%) highlighting it as a significant issue, and less than half expecting a growth in sales in 2020.
The Global Business Monitor also highlights the SME sector’s outlook when it comes to the impact of geo-political uncertainty. 72% of Irish businesses feel Brexit is the biggest threat to global economic growth, followed by the political situation in the US and the rise of protectionist economic policies worldwide.
Of those Irish SMEs trading internationally, the UK continues to represent best value and the greatest opportunity, followed by the US and Germany, Spain and France. But with Brexit on the horizon, almost two fifths (39%) of Irish SMEs say they are considering export markets beyond the UK.
However, 82% of businesses believe they face some form of challenge in trading internationally, most notably foreign exchange fluctuations, with 21% of SMEs citing this as a key factor.
Mark O’Rourke, Managing Director at Bibby Financial Services Ireland, says the strong performance of the Irish economy to date has meant that Irish SMEs continue to be largely optimistic about trading in post-Brexit domestic and international markets.
“There is a risk that underinvestment in preparation for Brexit will have a damaging effect on the sector and for Irish businesses,” O’Rourke adds, “with few SMEs having the resources to put specific contingency plans in place. Our research also indicates that more SMEs are being rejected for external finance by traditional lenders.”
The Global Business Monitor, produced by Bibby Financial Services, is an international survey of over 2,300 small and medium-sized enterprises across thirteen countries: Ireland, the UK, the US, Canada, Hong Kong, Singapore, Czech Republic, Poland, France, Belgium, Germany, Slovakia and the Netherlands.
To download and read the full report, click here.