An overwhelming majority of small and medium sized (SME) employers are confident about the prospects for the Irish economy and their businesses when casting an eye to next year.
That’s according to private and family businesses which took part in the PwC 2014 Irish CEO Pulse Survey.
The survey further revealed that over half (54 per cent) of Irish SME leaders feel that their business is in better financial health now compared to prior to the financial crisis some five years ago. Despite this optimism, however, over a quarter (27 per cent) feel that their business is in worse financial health and is a sign of the continuing challenges in this sector.
Said PwC partner Billy Sweetman: “The survey shows that many Irish SMEs are in growth mode and are feeling positive about prospects for their businesses.”
While the south east continues to lag somewhat behind Dublin in terms of job growth, up to five per cent of respondents are expected to hire at least one new employee in the region next year.
Meanwhile, a third of firms surveyed nationally believe they’ll boost employment numbers by greater than five per cent next year, a projection partly brought about by improved consumer sentiment and greater spending power.
Much of this growth is derived from tried and tested markets with the UK being a very important driver in this predicted increase.
Mr Sweetman added: “However, challenges still remain in this very important sector for Ireland including access to finance, skills shortages, wage pressures and increasing tax burdens.”
Many firms are now focusing on growth strategy, after many retrenchment years, he added.
“Banks and their funding issues are affecting small firms expanding when looking at working capital of €50,000 to €200,000, with many SMES finding it hard to source monies to fund such expansion.”
While there is some level of relatively cheap European investment bank funding out there via Irish banks, security for such loans can also be an issue. A new ICC or state bank for business would help, we suggested, with Billy recommending some firms look at the Enterprise Investment Allowance (EIA) scheme.
This allows investors deduct their income tax against investment, with the investment tied up for four years.
This could cost over €10,000 to set up but represents a means of raising equity funding for companies and allow staff or owners to invest in companies.
The limit that can be raised in total stands at €10 million and has been used by some Waterford-based firms.