New survey: SMEs confident on sales despite cost pressure

New Bibby Financial Services research finds 60% of SMEs increased sales in the past six months, while 76% raised prices and almost half report a growing need for finance

60% of SMEs report increased sales in the past six months, with 71% expecting further growth 

Businesses report 10% increase in operating costs due to rising cost of doing business, with three quarters of SMEs saying they have had to increase prices 

55% have experienced supplier insolvencies and 54% have experienced customer insolvencies in the last six months

Nearly half (46%) of SMEs report a growing need for finance, despite challenges accessing funding

Over half of SMEs (55%) expect to increase international trade, and with M&A activity firmly on the agenda for 2026

 

Confidence and sales outlook remain strong

Business confidence among SMEs in Ireland remains strong, with 83% expressing optimism about their prospects for 2026 despite ongoing macroeconomic pressures and rising costs. This is according to new research conducted with 250 Irish SME owners and decision makers by Bibby Financial Services, a leading provider of financial support and finding solutions to Irish SMEs. The study focused on a range of sectors including manufacturing, construction, wholesale, transport and services.

The research shows that 60% of businesses are reporting increased sales over the past six months, up from 53% in the previous wave of research. Looking ahead, 71% expect sales to rise further, increasing to 78% among SMEs using external finance – highlighting the growing role of funding in supporting growth. Confidence is particularly strong among larger SMEs with turnover above €5 million (92%), as well as in the wholesale (93%) and manufacturing (90%) sectors. 

 

Investment intent high, but more selective

Irish SMEs continue to demonstrate a strong appetite for investment, with 95% of Irish SMEs planning to invest in the coming year. However, rather than pursuing broad based expansion, businesses are being more selective about where they invest, with many prioritising investment in areas that support productivity, digital capability and operational resilience.

Top investment priorities include:

• Staff training and development (35%)
• Digital technology and IT (34%)
• Recruitment (30%)

Margin and cost pressures are intensifying

Rising costs continue to present a significant challenge for SMEs, with over half (52%) citing inflation and high costs as a primary concern, closely followed by energy costs (51%). Respondents say that on average, operating costs have increased by 10%, rising to nearly 13% in the construction sector. As a result, over three quarters (76%) of SMEs have increased prices, rising to 83% in the transport sector. One in five say they are unable to pass on costs and are absorbing the impact.

Margin pressure is particularly acute among larger SMEs, with 90% of businesses with turnover above €5 million reporting reduced profitability. This highlights how cost pressures are increasingly influencing how businesses make spending decisions, not just their day-to-day operations. In practice, this means investment is being paced and prioritised, not paused.

Alongside cost pressures, SMEs are also dealing with increased risk in their supply chains and customer base. In the past six months over half (55%) have had a supplier become insolvent or stop trading, while 54% have experienced a customer becoming insolvent or ceasing operations.

These challenges are more pronounced among internationally trading businesses, highlighting the added complexity and risk that comes with operating across borders. On average, SMEs reported two suppliers and two customers have become insolvent or stopped trading in the past six months.

Two fifths (40%) of SMEs have also suffered a bad debt in the past year, with wholesale businesses particularly exposed.

 

Access to finance rises up the agenda for SMEs

Access to finance is becoming an increasingly important issue for SMEs, with 46% reporting a greater need for funding and 51% saying they are now more likely to use external finance compared to six months ago. However, challenges remain, with 57% believing access to finance has become more difficult – rising to 72% in the transport sector. 

More than half (52%) believe banks are less willing to lend, while 40% feel that traditional bank funding does not fully meet their needs. Businesses are primarily seeking funding to support expansion and investment (40%) as well as day-to-day operations (35%), underlining the growing importance of finance as a strategic enabler. 

 

International focus is still there

International trade is firmly back on the growth agenda, with 55% of SMEs expecting it to increase over the next 12 months. Over a quarter (28%) identify international trade as a key opportunity, rising to 39% among larger firms and 34% among business in Leinster. At the same time, 65% of SMEs are exploring merger or acquisition activity for 2026, signalling strong ambition for growth. 

However, internationally trading businesses are also more likely to experience supplier and customer insolvencies, highlighting the increased risks that accompany global expansion. While uncertainty remains a feature of the operating environment, many Irish SMEs continue to plan, invest and grow – provided growth is pursued with control, clarity and strategic intent.

 

Mark O’Rourke, Managing Director of Bibby Financial Services Ireland, says

“Irish SMEs are operating in a more complex and uncertain environment, with renewed inflationary pressure and global volatility reshaping decision-making. Despite this, confidence remains strong, with more than eight in ten businesses optimistic for the year ahead. 

Many Irish SMEs plan to continue to plan, invest and grow – provided growth is pursued with control, clarity and strategic intent. Rather than pursuing broad‑based expansion, many SMEs are prioritising investment in areas that support productivity, digital capability and operational resilience. Those that balance financial discipline with investment in productivity, capability and resilience will be best placed to navigate the remainder of 2026 and beyond.”

 

What is SME Confidence Tracker?

Bibby Financial Services’ SME Confidence Tracker is a twice-yearly insight report that has been running since 2015, capturing the sentiment, challenges and financial outlook of small and medium-sized enterprises (SMEs) in Ireland. It provides a balanced picture of how businesses are performing, how confident they feel about the months ahead and the pressures shaping their decisions. As well as tracking confidence levels over time, it explores operational challenges including cashflow, late payment behaviours, cost management and sector-specific trends.

This particular study is based on research of 250 Irish SME owners and decision makers across the manufacturing, construction, wholesale, transport and services sectors. Research was conducted by independent specialists, Critical Research, between 11^th and 21^st March 2026.