The October 2019 SME Market Monitor from Banking & Payments Federation Ireland has recorded the first quarterly decline in employment in 26 quarters. 

The survey was prepared by EY-DKM Economic Advisory Services.

Activity in tourism and construction both declined through Q2, with visits to Ireland in the quarter down 1.8% compared to Q2 2018, and the Ulster Bank construction PMI indicating a decline of 1.8 points in construction activity.

Among consumers, the latest KBC consumer sentiment index fell to its lowest level for six years in September, reflecting unease over the outlook for the Irish economy in general and personal finances in particular. 

• Download the EY-DKM/BPFI SME Market Monitor

In Association with

Annette Hughes of EY-DKM commented: “While the economy will grow by a respectable 3.7% this year, the SME environment is seeing some negative movements in key economic indicators. Some SME sectors, notably tourism, are expected to be increasingly challenged over the coming weeks and months.”

According to another survey from Bibby Financial Services,  half of Irish SMEs see rising costs are their main challenge, while four out of ten highlight cashflow as a significant issue. 

When asked what area is most problematic for managing cashflow, 40% cited difficulties collecting payment from customers on time. In addition, 30% suffered a bad debt in the last year, and the average amount lost was €26,600.

Bibby managing director Mark O’Rourke added: “There is a risk that underinvestment in preparation for Brexit will have a damaging effect on the sector and for Irish businesses, with few SMEs having the resources to put specific contingency plans in place. Our research also indicates that more SMEs are being rejected for external finance by traditional lenders. 

“It’s therefore more important than ever that SMEs look beyond the major banks to consider a wider range of financing options, which are typically better suited to the needs of smaller businesses.”