Irish SMEs are more optimistic now than they have been for years, about the economy, employment and investment levels.
ISME's second quarterly business trends survey, found 42% of companies to be more optimistic about business prospects than 12 months ago, representing a net 9% increase on the previous quarter and a 67% increase year-on-year.
In the last quarter, 30% of SMEs increased employment, compared to 21% who reduced staff. The 9% net increase is in contrast to a 15% decrease in the same quarter last year. The overall increase in employment was also reflected in the manufacturing sector, which recorded a net increase in employment for the first time in three years.
Employment prospects continue to be positive, with 26% of companies expecting to employ more in the next 12 months, with a 19% increase in the services sector and a 23% increase in the distribution sector.
Almost one in two companies expects to increase their levels of investment over the next 12 months, compared to only 7% planning a decrease.
"While overall the results are positive, from an SME perspective there is no doubt that the cost environment represents the biggest threat to the future development and growth of small business," said Mark Fielding, ISME chief executive.
Business costs were listed as on-going problems for SMEs, with increases of 10% recorded in rents, wages, raw materials and insurance. Other costs identified as causing particular difficulties included transport, electricity, postal costs and local rates.
