Munster SMEs are entering 2026 with clear ambition and strong intent to invest

67% of Munster SMEs expect to increase prices for customers as a result of Budget 2026

9 in 10 Munster SMEs express concerns over pension auto-enrolment, with 52% expecting to absorb the costs involved

Over a quarter of SMEs lack the cashflow to scale or invest, while those with cashflow are three times more likely to expect growth

Almost half (47%) of businesses in Munster say access to finance has become more difficult in the past six months, however 32% say their need for external finance has increased in the last six months

90% of Munster SMEs plan to invest in 2026, focusing on recruitment (38%), digital technology and IT (35%) and new products or services (33%), with €367,500 the average figure quoted

Two thirds (67%) of Irish SMEs say Budget 2026 has fallen short of expectations, as inflation, recruitment difficulties and tighter access to finance continue to weigh heavily on business sentiment. This is the highest figure across all provinces. According to the latest SME Confidence Tracker Report from Bibby Financial Services, Budget 2026 failed to address rising costs, with those in Munster particularly critical when compared to Leinster (59%). Despite these challenges, 83% of Munster SMEs remain optimistic about their prospects for 2026, reflecting a resilient business community determined to grow.

Inflation, finance access and Budget 2026 impact:

Inflation remains the leading challenge for SMEs in Munster, with 53% citing it as their top concern – highest across all provinces, while 33% of business owners identify it as the issue placing the most pressure on their business. The challenge is equally strong in Connacht.

67% of Munster respondents said they expect to increase prices for customers as a result of the Budget, 17% higher than the national average, while 23% anticipate reduced profit margins or workforce reductions. The top measures Munster SMEs would like to see from Government include:

• Low-interest loans or grants for expansion and job creation (42%)
• Simplified tax structures (38%)
• Lower or stabilised energy costs (30%) particularly among transport and manufacturing firms

Pension auto-enrolment adds new cost pressures:

The introduction of pension auto-enrolment in January 2026 is set to further increase payroll costs and administrative complexity, particularly for service-led businesses and wholesale firms. While 22% of Munster SMEs say they are fully prepared for the transition, 88% express concerns most notably increased payroll costs (52%), administrative burden (37%) and lack of information or guidance (35%).

Munster business owners’ planned responses to additional costs vary:

• 52% will absorb the cost (highest across all provinces)
• 23% will reduce other benefits
• 23% will increase prices
• 22% will delay pay increases

Link between cashflow health and business optimism:

Bibby Financial Services’ analysis highlights a strong link between cashflow health and business optimism: 63% of Munster SMEs report stable cashflow, compared 27% who do not have the cashflow to invest to grow and 7% who do not have sufficient cashflow to operate on a day-to-day basis. Connaught firms are most affected, with 42% lacking the cashflow needed to scale.

Access to finance has also become increasingly difficult, with 47% of Munster SMEs saying it has worsened over the past six months. The figure rises to 63% nationwide in manufacturing and 64% among firms struggling with cashflow. While 20% of Munster SMEs currently use external finance, lowest across all provinces, another 20% are open to doing so in the next year, with construction and smaller firms showing the highest intent.

The research also shows that businesses nationwide using external finance are significantly more likely to report growth, with 63% of users saying their sales increased over the past six months, compared to 43% of non-users.

Delayed payments stifling ability to invest and expand

Many SMEs continue to face cashflow challenges, with delayed payments and bad debt remaining persistent risks to profitability and liquidity. 49% of Munster SMEs report slower invoice payments. This compares to 65% in Leinster.

Bad debt remains persistent with 23% in Munster writing off debt in the last year, averaging €14,500   in losses. This is in comparison to 39% nationally.

Despite this, businesses are increasingly turning to external finance and government-backed supports such as SBCI funding to maintain stability and unlock investment opportunities. SMEs with strong cashflow and no exposure to late payments or bad debt are significantly more confident, underlining that financial health is the foundation for growth.

Nine out of ten Munster SMEs plan to invest in 2026:

Despite these headwinds, Munster SMEs continue to plan for the future. 90% intend to invest in the year ahead, focusing primarily on recruitment (38%), digital technology and IT (35%) and new products or services (33%), with €367,500 the average figure quoted, double the national figure.

Among the opportunities Munster SMEs see for 2026, attracting new customers (63%), building new supplier relationships (40%) and taking on new staff (38%) come out on top. There is increased optimism among larger businesses with a €5 million+ turnover, and those confident about their prospects in 2026.

Key motivations for investment include staying ahead of competitors (30%), business expansion (24%) and reducing costs or increasing efficiency (23%).

David Greene, Sales Lead at Bibby Financial Services Ireland, said:

“Munster SMEs are entering 2026 with clear ambition and strong intent to invest. With nine in ten businesses planning investment next year, and an average commitment of over €360,000, the scale of ambition across the region is striking. Firms are prioritising recruitment, digital technology and new products and services as they look to build capacity, strengthen competitiveness and unlock new growth opportunities.  

This optimism reflects a business community that is forward looking and determined to invest, even as operating conditions remain challenging. What will be critical now is ensuring SMEs have access to the right financial supports and flexible finding options to turn these plans into action. With stronger cashflow and better access to finance, Munster businesses are well positioned to translate their investment intent into sustainable growth for the year ahead.”

About Bibby Financial Services Ireland:

Bibby Financial Services is Ireland’s largest independent SME funder. With over 19 years of experience operating throughout the island, the company facilitates more than €1 million weekly in new funding limits, in addition to processing significant weekly payments for existing clients. Bibby Financial Services offers flexible finance solutions to help businesses manage cashflow, drive growth, complete management buy-ins and buy-outs, restructure and fund mergers and acquisitions.

We provide support to businesses with a turnover of €750,000 or more, with expertise across sectors such as Manufacturing, Food and Beverage, Wholesale, Transport, Construction, Recruitment, and a broad range of professional business services. The company was awarded Financial Services Company of the Year at the Chambers Ireland InBusiness Recognition Awards 2025.

Bibby Financial Services Ireland is part of Bibby Financial Services Group, an independent financial services partner to over 8,500 businesses across 9 countries in Europe and Asia, with a total funding capacity of €1.3 billion.

Please visit Bibby Financial Services Ireland for more information. You can also follow us on LinkedIn.