Small Firms Outlook 2017

Wednesday, 4 January 2017

    • Small firms cautious as they enter 2017
    • Domestic economic growth offers biggest opportunity while wage inflation and Brexit are the most serious risks
    • Almost two-thirds of small firms will recruit in 2017

The mood amongst the small business community at the start of 2017 is cautious, the Small Firms Association (SFA) found in its ‘Small Firms Outlook 2017’ survey report, published today. 50% of owner-managers feel that the business environment is improving, down from 77% one year ago and 66% in May, with 18% indicating that it is disimproving.

Patricia Callan, SFA Director, said “2016 has been a challenging year for small business. The optimism that existed at the beginning of the year has given way to a much more cautious sentiment among small businesses, due to emerging wage demands, Brexit and downward revisions of growth forecasts. Still, 52% of SFA members say their businesses are growing, with only 9% declining. This shows that 2017 still has the potential to be a strong year, if the risks are managed effectively at firm level and Government level.”

Asked what they see as the biggest opportunity for their business in 2017, domestic economic growth was highlighted by 32% of businesses. Other positive factors included specific sectoral opportunities, bringing new products to market, new brand/marketing campaigns and exporting.

64% of survey respondents indicated their intention to recruit over the coming year, down slightly from a pre-Brexit survey in May. This strong job creation outlook was welcomed by Callan: “Small firms already employ over half of the private sector workforce and almost two-thirds of our members will be hiring in 2017. Small firms have a crucial role to play in job creation around the country, reducing unemployment and attracting emigrants home to work.”

The survey results, however, highlight a number of areas of concern for small firms. Callan continued, “A number of risk factors for 2017 have been highlighted. These include wage inflation (#1 at 22%), Brexit/Sterling exchange rate, domestic economic stagnation and cashflow issues. Many of these require decisive measures at Government level and the SFA will work with the Department of Jobs, Enterprise and Innovation and other departments to ensure the appropriate actions are taken.”

“Full tax equalisation between the self-employed and employees will remain a priority in 2017, as will access to public contracts for small firms and cost competitiveness. Investment in housing, broadband, childcare and transport infrastructure must be prioritised to ensure that Ireland remains an attractive location for investment and talent,” commented Callan.

In conclusion, Callan stated, “The fundamentals of the Irish economy are strong and economic growth and job creation are forecast to continue in 2017. If the specific concerns of small businesses are addressed, 2017 will be a very positive year for the sector, allowing the small business community to fulfil its potential in terms of job creation, enhancing local communities and driving economic progress. The Government must put small business at the heart of its policies by embracing the ‘Think Small First’ principle and ensuring that all policies are job-proofed.”

Ends

For further comment or interview, contact Patricia Callan, SFA Director, on tel: 01 6051602 or 087 6999345 or email: patricia.callan@sfa.ie


Editor’s note

The SFA ‘Small Firms Outlook 2017’ survey was conducted between 1 and 15 December 2016. The results are based on 748 responses from a sample of 3,000 SFA members.

The SFA is the trusted partner of over 8,500 small businesses in Ireland. Its vision is of Ireland as the most vibrant small business community in the world – supporting entrepreneurship, valuing small business and rewarding risk takers.

More information about the SFA is available on the SFA website: www.sfa.ie or Twitter: @SFA_Irl
Close