Small Firms Outlook 2018 - Small firms cautiously optimistic as they enter 2018

Tuesday, 2 January 2018

  • Small firms cautiously optimistic as they enter 2018
  • Domestic economic growth offers biggest opportunity while wage inflation and the ability to attract talent pose the biggest risks
  • Nearly three-quarters of small firms will recruit in 2018

The mood amongst the small business community at the start of 2018 is cautiously optimistic, with nearly two-thirds of owner-managers believing that the business environment is improving, up from 50% one year ago and 61% in May 2017. That’s according to the Small Firms Association (SFA), the Ibec group, in its ‘Small Firms Outlook 2018’ survey report, published today.

Sven Spollen-Behrens, SFA Director, said: “2017 has been a challenging year for small business. Whilst cautious optimism seems to be returning amid emerging wage demands, the increasing cost of doing business and Brexit dampens the mood. However, nearly 60% of SFA members say their businesses are growing, with only 4% declining. This shows that 2018 has the potential to be a strong year, if the risks are managed effectively at firm level and Government level.

“71% of survey respondents indicated their intention to recruit over the coming year, up substantially from the SFA survey in May 2017. Small firms already employ half of the private sector workforce and nearly three-quarters of our members will be hiring in 2018. 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. Spollen-Behrens continued: “A number of risk factors for 2018 have been highlighted, such as wage inflation, the ability to attract talent, legislative and regulatory burdens, increasing business costs as well as Brexit/Sterling exchange rate. Many of these require decisive measures at Government level and the SFA will work with the Department of Business, 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 2018, as will access to public contracts for small firms and cost competitiveness. In recent decades, Government has been successful in attracting FDI. However, the focus must now shift to small businesses and it is time to create a strategy for growth for small businesses with special focus on tax competitiveness and the cost of doing business, especially in light of Brexit.

“The fundamentals of the Irish economy are strong and economic growth and job creation are forecast to continue in 2018. If the specific concerns of small businesses are addressed, 2018 will be a very positive year for the sector.”

ENDS

For further comment or interview, contact Sven Spollen-Behrens, SFA Director, on tel: 01 6051602 or 087 1609403 or email: sven@sfa.ie

Editor’s note

The SFA ‘Small Firms Outlook 2018’ survey was conducted in November 2017. The results are based on 732 responses from a sample of 2,500 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 at www.sfa.ie or on Twitter @SFA_Irl
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