ITI – Most businesses Riding Wave of Economic Recovery
12th August 2021
InterTradeIreland’s latest quarterly business monitor reveals companies on both sides of the border are firmly in recovery mode, as Covid-19 restrictions begin to ease.
Indicating a return to economic momentum, three quarters of all businesses are now operational, while over half of SMEs in the tourism and leisure sectors have re-opened their doors.
Growth is starting to move on the path of pre-pandemic levels – 71 per cent of firms report they are stable or growing.
An up-lift in sales is visible across all sectors and size of firms. However, the standout performers are businesses that export off the island and those that trade across the border.
Kerry Curran, InterTradeIreland’s Acting Director of Strategy and Policy said: “It’s great to see that many firms are now on course for recovery. InterTradeIreland’s research demonstrates exporters and cross-border traders consistently lead the way in growth, which is again borne out in these latest figures. Other bright spots include a return of consumer confidence and plans among SMEs to undertake more investment over the next twelve months.”
“However it’s worth pointing out that for businesses thinking about making investment decisions, over a third in Northern Ireland and 36 per cent in Ireland say stability in the new trading arrangements is a very important factor impacting their spending decisions. This illustrates the importance of clear guidance for firms when doing business between Ireland, Great Britain and Northern Ireland.”
The twin impacts of both Brexit and Covid continue to ripple through the economy, particularly affecting supply chains.
InterTradeIreland’s survey reveals more firms are now sourcing components locally, within their own jurisdiction. This shift is most prevalent for firms in manufacturing and construction, with nearly a quarter of businesses in these sectors opting to buy from suppliers nearby. Across all the firms surveyed, 15 per cent of companies are now buying from a local source.
In terms of issues facing companies, Covid remains the key challenge. However, other growing concerns high on the agenda for businesses include the impact of the rising costs of overheads, the rising costs of energy and recruiting staff.
“Over half of businesses are reporting that rising costs is a pressure point. In addition, firms are finding it hard to recruit the correct people; it’s not unreasonable to assume that wage inflation could also be on the cards as SMEs seek to attract talent.”
“For businesses that want to stay competitive, innovation is key. Technological change is at the intersection of productivity and growth. It’s heartening to see that one in four business that buy and sell across the border plan to engage in research and development activity in the next 12 months.
It’s not enough for firms to stand still, to move forward SMEs must invest in innovation,” Kerry concluded.