Optimism rising as SMEs see light at end of tunnel
THE small business sector is at last moving in the right direction, with three quarters of key business trends now positive, according to a new survey.
The report from small business group ISME found sentiment among small and medium enterprises (SMEs) was on the up across a number of areas such as business confidence, market expectations and employment plans.
The ISME report asked business owners to give their opinion on 13 aspects of running a small business in this country.
In 10 of the 13 key indicators, businesses reported things were improving. Business confidence was now a net positive for the SME sector for the first time in at least two years.
A majority of companies now expect to increase employment in the near future – something that has been unheard of since the recession took hold.
But concerns remain about current and future exports.
And expectations, while still in positive territory, have declined sharply in the last quarter. Market sentiment around current exports fell from 41pc to 22pc, while expectations around future exports dropped from 53pc to 45pc.
Despite the improvements, ISME chief executive Mark Fielding claimed the Government was still not doing enough.
"Now that business confidence is increasing, it is incumbent on Government to put in place the appropriate environment in which business can revive and plan for a positive future.
The SME private sector must also ensure that wage rates are held for the foreseeable future, through a pay freeze for at least one year, to bring our wages more in line with our competitors".
"The biggest concern for all SME sectors, as mentioned in the survey is economic uncertainty, demonstrating to Government that the domestic economy must be protected through a real jobs plan and a concerted effort to bring the state sector into line on costs.
"The wealth generating private sector cannot continue to pay through the nose for the costly state sector and Croke Park 2 must bring greater and faster cost reductions," he added.
Meanwhile, the Small Firms Association (SFA) has called on the Government to stop imposing what it sees as unnecessary costs on small business and allow the sector to grow.
"Government measures taken since 2010 have already added over €660m per annum to labour costs, through employer PRSI changes, pensions levy and most recently the changes to the redundancy rebate," claimed acting director of the SFA Avine McNally.
"The cumulative impact of this has been a 1.4pc increase in labour costs, while at the same time both employers and staff in the vast majority of small companies have taken pay cuts.