Irish SMEs upbeat with sales surge
Irish SMEs upbeat with sales surge – Bibby survey
- 61% of SMEs expect sales to grow further this quarter, according to BFSI SME Tracker survey conducted among 350 business owners
- Export market remains strong with eight in ten exporting companies predicting further sales growth
- Despite growing sales and strong forecasts, 71% of companies did not report increased profitability which is cause for ‘concern’
Almost half of Irish SMEs reported increased sales in the first quarter of 2014, according to the results of the BFSI SME Tracker, a survey conducted by Behaviour & Attitudes for Bibby Financial Services Ireland, the leading invoice finance company.
The survey, conducted among 350 business owners to track the experience of SMEs in Ireland, found that 37% of SMEs experienced stronger trading conditions in the first quarter of 2014, compared with the previous quarter.
Of the companies who reported stronger trading conditions, 44% were exporting abroad while 35% were trading domestically.
The outlook is strong for the sector with 61% of Irish SMEs expecting sales to grow further this quarter.
Furthermore, export companies are even more upbeat with eight in ten of those that do business abroad expecting increased sales.
However, while sales were on the up, only 30% of SMEs reported improved profitability.
The survey found that profitability was stronger amongst exporting versus non-exporting companies, with almost one half of exporting companies reporting profits in Q1 compared to only 26% of non-exporting companies.
Commenting on the survey findings today, Ronan Horgan, Managing Director, Bibby Financial Services Ireland said that the results were ‘encouraging’.
‘Given the potential of the SME sector to create and maintain jobs in Ireland, it’s encouraging to see tangible evidence of increased trade for the sector, particularly in export markets.
‘Economic recovery in the UK and US markets means that Irish businesses have increased opportunity to sell abroad which, looking at the results, is happening.
‘However, the lack of profitability is a cause for concern. Many Irish SMEs are suffering unnecessarily as a result of limited access to finance, bad debts and credit management issues all impacting profitability. Access to credit continues to act as a barrier to growth and job creation for SMEs,’ noted Mr Horgan.
The SMEs sector in Ireland make-up 99.6% of total employers and employ 70% of people.
‘It’s imperative that credit is flowing. Particularly, at a time when export markets are strong, we need to steal a march.
‘Credit is key and while there continues to be a focus on the area from our policy makers and industry on how to improve access, the SME sector itself need to do more. High street banks are likely to be constrained in the amounts they can lend for the foreseeable future, so the onus is on the SME sector itself to think outside the bank and pursue alternative sources of funding which are available to support them,’ concluded Mr Horgan.
In its recent Action Plan for Jobs, the government advocates the need for alternative sources of funding to stimulate SME export-led recovery. The Plan warned that the ‘existing constraints’ on export-orientated firms ‘could become more acute’.
BFSI is part of the Bibby Group, a global leader in invoice financing with 47 offices across Europe, the US, Middle East and Asia.
Further information: pr360 01 637 1777
Note to editors:
BFSI is part of the Bibby Line Group, the largest independent provider of cash flow finance globally which provides €1billion funding to over 7,000 SMEs across 47 international offices in 15 countries. Bibby Line Group employs 6,000 people globally. BFSI provides a wide range of flexible funding solutions that help Irish businesses grow and expand. The company employs 30 people in Ireland and is based in Sandyford, Dublin.