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From Accountingnet.ie In Business
The Small Firms Association (SFA) has released the findings of its Spring Business Sentiment Survey. Commenting on the figures, SFA Director, Patricia Callan stated, “the overall survey results show a marked improvement in the sentiment of small business owner-managers; however many remain under serious pressure.” The survey was conducted during February and a total of 578 companies employing 11,574 people responded. The sample was drawn from manufacturing, distribution, retail and services sectors and from a regionally representative sample, with all parts of the Irish Republic included. The results show that 58% of respondents rate the OVERALL BUSINESS ENVIRONMENT currently as ‘poor’ or ‘very poor’, a significant decrease on the 70% who did so in November ‘09 and on the 75% who did so a year ago. Respondents that rated the overall business environment in Ireland currently as either ‘very good’ or ‘good’ doubled to 12% from the 6% who did so in November ‘09. Just under half of respondents (47%) expect the overall business environment in the next three months to be either ‘poor’ or ‘very poor’ in the current survey. When compared to the 74% who rated in the same manner at this point last year, this indicates a significant improvement in sentiment. Some 17% of respondent companies expect the overall business environment in three months time to be either ‘very good’ or ‘good’, a significant increase on the 7% of November ‘09 and almost treble the 6% of Quarter 1 of 2009. The percentage of respondent companies rating the expected overall business environment as ‘average’ has increased for the fourth quarter in succession. There is significant variation across SECTORS in regard to their views on the current business climate, with just over seven out of ten respondents (71%) in the distribution sector rating the overall business environment in Ireland currently as either ‘poor’ or ‘very poor’; higher than respondents from the manufacturing sector (59%) and services sector (54%). The proportion of respondents that rate the overall business environment as either ‘very good’ or ‘good’ again varies substantially between the services (16%) and manufacturing sectors (12%) and the distribution sector which are less positive as 5% only currently rate the overall business environment in Ireland as either ‘very good’ or ‘good’. Confidence in respondent’s OWN BUSINESS in Ireland in this survey shows a significant increase on November ’09, with over a quarter of respondents (28%) more confident about their own business compared to 15% in the previous quarter. While the percentage of companies rating their own business in Ireland as ‘about the same’ has maintained a similar level throughout all quarters, companies less confident in their own business have decreased significantly from 42% in May ‘09 to just under a quarter of respondents (24%) in the current survey.
Fig 1: Confidence in own business in Ireland compared to three months previously – Quarter 2 2009 – Quarter 1 2010 In relation to assessment of their business on a SECTORAL BASIS, just under a third (32%) of companies from the manufacturing sector are more confident about their own business compared to three months ago, a significant increase on the previous three quarters. The proportion of manufacturing companies that are less confident than three months ago has decreased significantly when compared to the previous quarter. While just under a quarter of distribution companies (24%) are less confident about their own business compared to three months ago, there has been a slight variation in the proportion of companies who are more confident and those whose confidence in their own business has not changed. Three in ten respondents (30%) from the service sector are more confident about their own business compared to three months ago, a significant increase on the previous quarter (16%). While the proportion of respondents who have the same level of confidence has not varied from the previous quarter, just over one in five respondents from the services sector (22%) are less confident in their own business compared to three months ago. The BUSINESS ACTIVITY INDICTORS are all at their most positive levels since the survey began in Q1 2009. The proportion of companies expecting increases to turnover in the next three months are 39%, profitability 35%, domestic sales 31%, customer base 38%, order books 34% and employee numbers 21%. Meanwhile, the proportion of companies expecting a decrease to turnover in the next three months are 26%, profitability 32%, domestic sales 24%, customer base 20%, order books 21%, output selling price 34% and employee numbers 24% are all at their lowest levels since the survey began. In terms of BUSINESS STRUCTURE, almost half of respondents (48%) expect their business structure to stay the same in the next three months, with the proportion of companies expecting to restructure (17%), diversify (10%) and decrease in size (13%) at their lowest levels across all quarters of the survey. Access to CREDIT, including both working capital and investment finance continues to be problematic, with the cost of working capital having increased for 15% of respondent companies in the last three months and the cost of investment finance having increased for 8% of respondent companies. One-fifth of companies (20%) have seen the availability of working capital decrease in the last three months, with some 13% indicating that investment finance availability has decreased. Callan stated “Entrepreneurial businesses that are well structured and well managed will see opportunity in uncertainty; however, they need assistance from Government to provide support and create an environment that will assist them in the creation of jobs and help them become more productive, innovative and in control of their costs. Small businesses daily are going out of business, the victims of slow payment by creditors, the high cost of doing business, a taxation policy that takes no account of the ability of small firms to pay their Revenue obligations and, at the root of it all, cashflow problems.”
For further information, please contact:
Patricia Callan, Director, Small Firms Association Telephone: 01 605 1602 e-mail: patricia.callan@sfa.ie Website:http://www.sfa.ie/ © Copyright 2005 by Accountingnet.ie |
