Business Irish

Saturday 20 January 2018

Exporters increase sales despite economic gloom

Peter Flanagan

Peter Flanagan

NEARLY 80pc of Irish exporters expect to increase their sales next year, despite ongoing problems in the world economy, a new survey has shown.

The annual survey of its members by the Irish Exporters Association (IEA) found that 77pc believed they would export more in 2013. That compared with the 57pc of firms that actually did increase sales abroad during 2012.

The wide-ranging survey, which covered topics as diverse as Ireland's reputation abroad, to whether excessive bureaucracy affected companies' ability to do business here, strikes a broadly optimistic tone, albeit with some caveats.

IEA chief executive John Whelan said the report showed the pressure exporters were under, and their resilience.

"The relentless pursuit of cost competitiveness is fundamental to the continued success of the export sector," he said.

"Growth in Ireland will be export led for the foreseeable future and therefore policymakers must implement measures to facilitate growth in exports which will ultimately feed into the domestic economy and speed up economic recovery," he added.

Research and development is playing an increasing role in the exports. Almost 86pc of respondents plan to invest in new products or services over the next two years, while more than half of business owners are recruiting sales and marketing staff.

Although the vast majority of respondents believe Ireland will remain in the euro and the single currency will be kept intact, more than half of all businesses have had to write off bad debts this year.

When it comes to accessing finance, the exporters broadly follow the lead of a government report on SME lending released earlier this week. Some 72pc of firms believe access to finance has not improved in the last year, while one in three exporters said the banks do not understand how their business works, and consequently don't understand their working capital cycle. At 77pc, awareness of the Credit Review Office (CRO) matches the wider small business sector, but only 54pc of traders would approach the CRO if it was rejected for a loan. Launching the report, Fine Gael junior minister Brian Hayes said it was "astonishing" companies wouldn't use the CRO.

The survey also reveals a wide range of views on the banks that provide finance to exporters. Investec are comfortably the most favourably viewed, with 42pc saying they do a good job, but at the other end of the scale is AIB, with only a 27pc approval rating.

Patrick Burke, a partner with Grant Thornton who sponsored the survey, said it was "essential for economic recovery that the export sector has better access to finance to fund growth".

"Given the difficulties obtaining finance it should remain a policy priority to improve the flow of credit to export companies who are the key drivers of growth that can help stimulate recovery in the domestic sector," he said.

Exports are expected to grow more than 3pc to just over €180bn this year.

Irish Independent

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