The results of the latest ISME Quarterly Business Trends Survey for Q3 2016 indicate an improvement in business confidence among SME owner managers, with an increase in 10 out of 12 confidence indicators within the survey.
However, almost half (49 per cent) of SMEs surveyed anticipate negative effects on profits due to the fall-out from the EU referendum. The Irish exports sector voiced the biggest concerns regarding the EU referendum outcome.
Neil McDonnell, CEO, ISME, said of the survey results: “While we welcome the improvement in the overall business sentiment index for this Quarter, we highlight the need for the Government to do more to prepare for the impact of Brexit.
“The Budget was a missed opportunity to Brexit-proof our economy; mitigating effects such as the drop in sterling, which is now at its lowest level in five years.
“The Irish economy is particularly vulnerable to the shocks of Brexit given our interconnectedness. Currency fluctuations, excessive business costs and the continuing difficulties in accessing bank finances are all having a negative effect on SMEs.
“Exporters are most susceptible to the ramifications of Brexit; this was highlighted in the report, with 34 per cent confirming Brexit as their biggest concern.”
As a consequence of this latest survey, the ISME wants the following action taken:
- A dedicated unit within the Department of Jobs, Enterprise and Innovation to coordinate the national response to Brexit.
- Expand the export capacity of the SME sector through soft supports.
- A benchmark and overhaul of all government-influenced business costs with a target of a reduction to below the EU average within two years.
- A complete review of labour market inhibitors, including social welfare constraints and black economy.
- Introduce new and improve existing activation schemes in conjunction with employers.
- Reform the social welfare system to make it more profitable to work and reduce state assistance for those who refuse job offers.
- Increase job-rich infrastructure investment.
- Ensure real measurable access to affordable credit for viable SMEs.
- Outsource more state sector services to SMEs, task OGP in this regard.
- A greater training incentive for small business to compensate for the cost of on-the-job training.
“It is incumbent on this Government to do all it can to support SMEs in the run-up to Brexit,” added McDonnell.
“Although the improvements in the key indicators are welcome, the Irish economy is notably susceptible to the shocks of Brexit.
“We must remain vigilant on our cost and tax competitiveness and do all we can to encourage FDI investment from the Brexit fallout to these shores.”