More than half of Irish SMEs in better shape than before downturn
But the survey by PWC of companies employing fewer than 250 people also found that businesses still face key challenges, despite signs that the economy is recovering. It said that 27pc of the SMEs surveyed said their finances are in a worse state than they were before the recession, while only 28pc said that finance is easier to obtain now than it was a year ago.
Despite that, the PWC survey found that 82pc of SMEs are optimistic about the prospects for their businesses in the coming year, with 85pc of them expecting revenue growth and 73pc predicting increased profits. A further 60pc said they plan to hire more staff and 51pc said they're planning capital investment.
Brian Bergin, deals partner at PWC Private Business Services, said the survey demonstrates that many Irish SMEs are "in growth mode", adding: "Much of this growth is derived from tried and tested markets, with the UK being very important. “However, challenges still remain in this very important sector for Ireland, including access to finance, skills shortages, wage pressures and increasing tax burdens.
“Of those SMEs surveyed, 10pc are planning to restructure existing borrowings, while 61pc believe that the inability to finance growth is the biggest threat to their business expansion. Although the government has been trying to encourage Irish businesses to expand beyond their traditional export markets such as the UK and mainland Europe, the survey shows that most SME business leaders - 61pc - believe the main opportunity for growth lies in targeting the domestic market and existing export markets. Only 8pc plan to target new geographic markets, including China, although 64pc of SMEs hope to grow their export volumes in the next three to five years. Surprisingly, only 56pc of Irish SMEs this that technological advances will impact their business in the years ahead.
Fewer SMEs also believe their businesses will be affected by global trends such as increased urbanisation, demographic shifts, changes in global economic power and resource scarcities. “On all fronts, Irish SMEs are lagging their global counterparts when implementing change in their businesses to capitalise on these trends," said PWC. It noted that only 16pc of Irish SMEs have initiated or completed changes to become more innovative.Irish Independent