Optimism high among Irish businesses despite concerns

Irish businesses are growing increasingly concerned about skills shortages, the rising cost of energy, and continued economic uncertainty prompted by Covid-19, despite reporting high levels of optimism for growth in the coming 12 months. The latest Grant Thornton International Business Report (IBR) found that 85% of Irish businesses surveyed are optimistic about the coming 12 months, the highest of all 29 economies surveyed for the International Business Report and significantly higher than the EU average of 65%.

This growing level of optimism is reflected in revenue forecasts with almost twothirds (63%) of mid-sized Irish businesses expecting revenues to increase in the coming 12 months.

Meanwhile, 63% of businesses are also expecting to increase the selling price of their goods and services in the same period - an increase compared to the 44% of businesses who reported increasing selling prices in the first six months of 2021.

BARRIERS TO GROWTH

However, a rapid bounce back in the global economy following the easing of global Covid-19 restrictions over the past six months has brought about new challenges for businesses as they too emerge from the pandemic.

Responding to the International Business Report survey in the second half of 2021, 63% of businesses cited the availability of skilled workers as a barrier to growth – up from the 37% who reported this as a barrier to growth in the first half of 2021.

Similarly, in the competitive labour market at present, more than half (56%) of businesses report the cost of labour as a barrier to growth – more than double the 27% of businesses who reported this as a challenge in the first half of 2021.

Energy prices are also having a real impact on businesses potential for growth over the coming 12 months as 55% of Irish businesses reported this as a challenge to growth during the second half of 2021 – up from the 33% who cited it as a barrier in the first half of the year.

Overall, economic uncertainty was reported as a concern by almost half of Irish business (48%) despite the covid-19 economic recovery underway.

INTERNATIONAL TRADE

International trade continues to be an important pillar of growth for many Irish businesses. Over a third (37%) expect to increase exports in the coming year – a significant increase on the 15% of participants who reported this in the second half of 2020.

Similarly, 35% of businesses expect to increase revenue from non-domestic markets, while 23% expect to increase the number of countries they sell to.

In terms of revenue, the United Kingdom was noted as the market to bring in the highest revenue. However, the United States was identified as the key location for market opportunity.