Business leaders are relatively upbeat about their economic prospects for the year ahead, according to the inaugural Azets Barometer.
In fact, Irish businesses were found to be more optimistic than their counterparts in the UK, Denmark, Sweden, Finland and Norway.
However, when you drill down into the findings, it reveals that medium-sized businesses are more optimistic about the future than smaller firms.
The barometer highlighted that there is a clear correlation between business size and financial confidence with smaller firms in Ireland in a significantly weaker financial position relative to their peers.
Micro businesses employing 9 employees or less scored only 3.7 out of 10, indicating that the rising cost of doing business is weighing heavily on those firms.
Upper medium-sized businesses, which employ 100 to 249 employees, expressed the highest levels of optimism within Ireland's business community, scoring 7.5 out of 10.
Neil Hughes, CEO of Azets Ireland, said, "Double-digit increases in the minimum wage, lingering inflation, and higher taxes are putting a significant squeeze on smaller firms. With €1.75bn in warehoused pandemic-era debt due from 58,000 businesses, it is increasingly important that smaller firms are given flexibility and time to pay back the tax."
According to the survey, Irish business leaders ranked economic and geopolitical uncertainty (both 5.7) as the challenges at the forefront of their minds. This was followed by talent recruitment and retention (4.9) and regulatory compliance (4.4).
"As enhanced leave entitlements come into force and businesses face a tight labour market, it is unsurprising that firms are struggling to keep pace with regulatory change and recruit and retain talented people," Mr Hughes said.
On a more positive note, Ireland’s business community expects turnover, profit, and headcount to increase in the next 12 months, with scores ranging from 6.9 to 7.0. However, firms are more cautious about borrowing to fuel growth in 2024.
85% of Irish businesses score between 6 and 10, with 60% scoring 8 or higher, indicating widespread recognition of the importance of succession planning. This contrasts with an average of 47% in other Northern European markets.
The high scoring proportion in Ireland implies that succession planning is well integrated into their strategic planning and positions Ireland as a benchmark for effective succession planning.
"The long-term success of owned-managed and family-owned businesses across the country depends on succession planning. That’s why it’s positive to see Irish business leaders being proactive and putting in place plans that facilitate a smooth transition from one generation to the next," he said.
"Entrepreneurial, owner-managed, and family-owned businesses are at the beating heart of Ireland’s economy, and many have the potential to scale up their success."
Azets Ireland is a professional services firm that specialises in supporting the needs of mid-market, entrepreneurial, owner-managed, and family-owned businesses.
