84% of businesses are either as confident or more confident about the year ahead than they were 12 months ago, according to a new survey by the Association of Chartered Certified Accountants (ACCA).
The ACCA research found that, despite economic headwinds which has seen soaring energy costs and rising inflation, only 16% of SMEs are less confident about their business prospects in 2023 than they were a year ago.
However, the survey, which was conducted among a range of SME and finance professionals, found that many businesses were experiencing cash flow shortages.
69% said that interest rates and rising inflation were having a detrimental impact on their operations.
When asked what their biggest challenge would be next year, 38% said energy and business costs, closely followed by sectoral skills shortages.
Only 17% of the businesses surveyed said that there was enough policy supports in place to assist SMEs sustain and grow their business.
"These findings reflect the resilience, strong management structures, forward planning and future proofing that many SMEs have in place which will support them in the period ahead," said Caitriona Allis, Head of ACCA Ireland.
"However, the survey has also highlighted the considerable impact that energy costs, rising inflation and higher interest rates are having on their businesses and the longer that this economic environment persists, the greater the number of SMEs that will experience trading difficulties and cash flow shortages," she said.
Ms Allis said she would urge the Government to continue to monitor the challenges that small businesses face and seek to address the continuing shortage of skilled labour.
She said this is a very significant impediment to business growth and economic prosperity.
