Cost hikes the biggest challenge for firms
Cost inflation is the biggest challenge facing Irish businesses on both sides of the Border, according to a new report by InterTrade Ireland.
With almost a third of businesses at break-even, and nearly 80pc at or close to capacity, there is a vulnerable tier of the economy that could be exposed to inflationary pressures, InterTrade strategy and policy director Aidan Gough said.
But the overall picture from the cross-Border trade body's latest quarterly economic monitor is of a "robust economy, with companies going into potentially challenging times from a position of relative strength".
"We are seeing a resilient, sustained recovery and notable symmetry in challenges faced by firms both north and south. The number of companies across the island reporting stability or growth in the last quarter has remained fairly constant at 84pc; however, exporters continue to fare better than non-exporters," Mr Gough said.
He said there is an emerging trend of skills shortages in the construction sector, with nearly four in 10 respondents reporting difficulties in finding skilled labour. The findings echo recent statements from the Construction Employers Federation in Northern Ireland and the Construction Industry Federation in Ireland.
"An emerging skills shortage in the construction sector is obviously an obstacle to continued growth," Mr Gough said.
"This may lead to building firms beginning to feel the pinch in terms of the acquisition of new contracts and servicing the needs of fuller order books."
However, 82pc of construction firms said they were stable or growing. More than three-quarters said they were profitable or very profitable.