86% of SMEs in Munster say they are confident for the year ahead

• 57% of Munster SMEs report increased sales in the past six months, with 82% expecting further growth 

• Operating costs rising, with 33% in Munster reporting increases of more than 10%, as businesses manage pricing pressures

• 53% have experienced supplier insolvencies and 48% have experienced customer insolvencies in the last six months

• 35% in Munster report a growing need for finance, despite challenges accessing funding

• 45% of Munster SMEs expect to increase international trade, with M&A firmly on the agenda for 2026

Business confidence among SMEs in Munster remains strong with 86% expressing optimism about their prospects for 2026 despite macroeconomic pressures and rising costs. This is according to research conducted by Bibby Financial Services Ireland, a leading provider of financial support and funding solutions to Irish SMEs. The study focused on a range of sectors including manufacturing, construction, wholesale, transport and services.

The research shows that 57% of businesses in Munster are reporting increased sales of the past six months. Looking ahead, 82% in Munster expect sales to rise further over the next six months, compared to 71% nationally, highlighting strong growth momentum across the region.

Munster SMEs continue to demonstrate a strong appetite for investment, with 98% planning to invest in the coming year, higher than the national average of 95%. 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:

• Recruitment (31%)
• Staff training and development (31%)
• Digital IT and technology (31%)

The average investment figure in Munster is €434,484. This is higher than the national average of €188,100, reflecting continued investment activity among businesses in the region. 

Rising costs continue to present a challenge for Munster SMEs with 45% citing energy costs as a primary concern, closely followed by inflation and high costs (39%). Respondents say that operating costs have increased, with 33% reporting increases of more than 10%. As a result, 65% of Munster SMEs have increased prices to customers, while 14% have increased prices significantly. Less than a fifth say they are unable to pass on costs and are absorbing the impact (16% combined).

Margin pressure is particularly acute among larger SMEs, with 90% of businesses nationally with turnover above €5million 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, Munster SMEs are also dealing with increased risk in their supply chains and customer base. In the past six months, 53% have had a supplier become insolvent or stop trading, while 48% have experienced a customer become 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, Munster SMEs reported two suppliers and two customers have stopped trading in the past six months. 

One third (33%) of Munster SMEs have also suffered a bad debt in the past year, with wholesale businesses particularly exposed.

Access to finance is becoming an increasingly important issue for SMEs, with 35% in Munster reporting a greater need for funding and 61% saying they are now more likely to use external finance compared to six months ago. This is compared to a Leinster average of 50% reporting a greater need – showing access to finance is a particular pain point in Leinster.

39% of business in Munster believe banks are less willing to lend, while 29% feel that traditional bank funding does not fully meet their needs. Businesses are primarily seeking funding to support day-to-day operations (44%) as well as, expansion and investment (37%) underlying the growing importance of finance as a strategic enabler. 

International trade is on the growth agenda, but on a lesser scale than other provinces with 45% of Munster SMEs expecting it to increase over the next 12 months. 12% identify international trade as a key opportunity – compared to 34% in Leinster and 28% nationally. At the same time, 63% of Munster SMEs are exploring merger or acquisition activity for 2026, signalling ambition for growth.

While uncertainty remains a feature of the operating environment, many Munster SMEs continue to plan, invest and grow – provided growth is pursued with control, clarity and strategic intent.

David Greene, Business Development Manager at Bibby Financial Services Ireland, says: “SMEs in Munster are continuing to demonstrate strong confidence and intent to grow, despite operating in a challenging and unpredictable environment. With 86% optimistic about the year ahead and a significant majority planning to invest, it’s clear that businesses in the region are focused on building momentum and driving forward.

Encouragingly, over half of SMEs have reported increased sales in the past six months, and with 82% expecting further growth, there is a clear sense of commercial confidence. Many are prioritising expansion through customer acquisition, workforce growth and, in some cases, mergers and acquisitions - reflecting a proactive and opportunity-led mindset.”