Small firms 'fear economic outlook'
ISME chief calls on Government to stimulate sector with jobs strategy
CONFIDENCE among small and medium enterprises (SMEs) fell back during the second quarter of the year as uncertainty about the future economic climate returned to haunt business.
The latest business trends survey from small firms trade group ISME shows confidence slipped 9pc between April and June, while expectations for their business fell by 11pc and back into negative territory. Confidence in the business environment fell 8pc.
The slump is a blow to the sector and comes after a survey had shown significant improvement in the SME sector during the first three months of the year.
Export expectations slid 9pc but remain largely positive. Overall the results highlight the dependence on exports as a potential recovery area for the SME sector, with sales expectations ticking up 3pc.
ISME chief executive Mark Fielding said the results "highlighted the importance and the need for unrelenting attention to cost containment and growth strategies, both at firm level and also at government level".
He went on to call for the State to outline a number of measures to stimulate the industry.
"The Government must set out a clear path to recovery through a jobs strategy, the key to growth.
"Economic uncertainty continues to be the issue of most concern to SMEs and owner managers are less confident about the future and the Government's ability to deal with the economic situation.
"Structural reform should be the cornerstone of policy given that the government has few macro-policy instruments on which to draw.
"Addressing the key inhibitors to economic recovery, such as access to credit, late payments, rising costs of energy, rates, rents and red tape, is fundamental to growing Ireland's domestic and international trade," added Mr Fielding.
Economic uncertainty rose by 10pc for the 700 firms who responded to the survey, and current investment levels slumped 12pc.
"Government-influenced costs need to be curtailed and benchmarked against our international competitors," Mr Fielding added.
"The survey shows that owner managers will respond to any upturn in demand as expectations for exports remain above 50pc despite our higher cost-base. The second half of the year will be a vital test period for the current administration and its ability to sort out the economic mess we have faced over the last few years."