Report shows small firms trading well but business groups argue for more support

The SME Credit Demand Survey showed the hospitality sector had the highest percentage of firms reporting an increase in turnover, while the percentage of small- and medium-sized firms exporting jumped to 22%

Hospitality and retail operators voiced concern over cost burdens and lobbied for government help.

A report published by the Department of Finance showed the vast majority of small firms traded well last year, despite an inflationary environment, however some business groups have argued that cost pressures continue to weigh on employers.

The SME Credit Demand Survey showed the hospitality sector had the highest percentage of firms reporting an increase in turnover, while the percentage of small- and medium-sized firms exporting jumped to 22% from 19% in the previous year.

Neil McDonnell, Isme chief executive, said cost pressures have increased during this economic cycle, weighing on businesses viability.

While total employment is rising, and firms are entering the market, we are not seeing competitor entry in the sector where members are complaining of cost strain.

Mr McDonnell said businesses are struggling with average rents of more than €1,800 per month in addition to labour costs.

Hospitality and retail operators have voiced concern in recent months about cost burdens and have lobbied for government assistance.

Neil McDonnell said businesses are struggling with average rents of more than €1,800 per month.

Meanwhile, payroll statistics published in February by the Central Statistics Office (CSO) showed businesses in the accommodation and food sectors had more staff on the books than they did the previous year.

However, a number of closures have been reported in the service industry since the beginning of this year and more business failures are anticipated, according to two separate reports published by professional services firms Deloitte and PwC in recent weeks.

Some struggling businesses may become unviable this year following the winding-up of covid supports, which provided a lifeline for many firms.

Mr McDonnell is among the backers of the SaveJobs.ie campaign, which plans to get the concerns of small businesses on manifesto pledges of political parties ahead of the upcoming elections.

The SaveJobs campaign includes Isme, as well as pubs group the Vintners' Federation of Ireland, the Restaurants Association of Ireland, Nursing Homes Ireland, retail groups Retail Excellence and RGDATA, two hairdresser business groups, the Convenience Stores and Newsagents Association, as well as craft butchers.

Finance Minister Michael McGrath said the SME Credit Demand Survey “provides Government with vital information on which to base policy initiatives that support businesses to manage rising costs and further invest."