More businesses expect their turnover, profits and workforce to be lower at the end of 2008 than they were at the end of 2007, according to a survey of 400 companies across the region.
Businesses in Waterford, in particular, are most negative about turnover in 2008, with just 9% expecting their workforce to increase during the year. Additionally just 21% of Waterford businesses expect
things to improve in 2009, while a third anticipate a worse trading environment.
The latest South East Business Confidence Study suggests that expectations of businesses for 2008 are much lower than in the first survey conducted in May 2008. The twice-yearly surveys are conducted online by Kilkenny-based market research firm Market Dynamics.
There were some positive signals too, according to John Gilsenan, Managing Director of Market Dynamics, who noted that just 20% of businesses expect to have to implement redundancies during 2008. “There has been a very noticeable lowering of expectations in the last six months and businesses are now facing up to more difficult trading conditions. The biggest change in this period has been the fall in consumer confidence and this is now cited as the biggest challenge facing businesses throughout the region.”
It seems businesses in construction, financial services and retail/wholesale sectors are finding the environment toughest, with organisations in transport / distribution / communications and business services of the opinion that they will buck the trend: 56% and 47% respectively expecting increased turnover this year. Just a quarter of firms (26%) expect their profitability to be better than last year.
A total of 41% of businesses expect to be employing fewer people at the end of 2008, though 45% believe numbers will be maintained. The decline in consumer confidence, cited by 56% of respondents, is the biggest challenge facing businesses across the South East followed by labour costs and energy costs. Around one in five businesses stated that the downturn has had some positive effects on their businesses. Some expect competitors to come under pressure while others will take the opportunity to examine their internal structures.
Given the amount of emphasis by Govt agencies on training it was perhaps surprising that just over one in four businesses consider it to be very important while exactly half the businesses surveyed think it is moderately important.