Manufacturing & Supply Chain

The majority (84%) of businesses are either as confident or more confident about the year ahead than they were twelve months ago, according to a new survey by the Association of Chartered Certified Accountants (ACCA). The ACCA poll found that, despite economic headwinds which has seen soaring energy costs and rising inflation which is expected to see Irish GDP growth halved to 3.3% next year, only 16% of SMEs are less confident about their business prospects in 2023 than they were a year ago.

However, the survey, which was conducted amongst a broad range of SME and finance professionals, found that many businesses were experiencing cash flow shortages, with 69% stating that interest rates and rising inflation were having a detrimental impact on their operations.

When asked what their biggest challenge would be in 2023, 38% said energy and business costs closely followed by sectoral skills shortages (37%), with only 17% stating that there was enough policy supports in place to assist SMEs sustain and grow their business.

The domino effect of global to local challenges, and in particular its impact on sectors such as tech, was also a considerable concern for many businesses (69%).

Commenting on the survey Caitriona Allis (pictured), Head of ACCA Ireland, said: “While we know that 2023 will be a more challenging environment for businesses to develop and grow, this new poll is encouraging news for both SMEs and the wider economy with the majority being as confident or more confident about their prospects than they were a year ago.

“These findings reflect the resilience, strong management structures, forward planning and future proofing that many SMEs have in place which will support them in the period ahead.

“However, the survey has also highlighted the considerable impact that energy costs, rising inflation and higher interest rates are having on their businesses and the longer that this economic environment persists, the greater the number of SMEs that will experience trading difficulties and cash flow shortages.”

“While I have consistently welcomed the interventions that government has made to date, including its flexibility in administering the Energy Business Support Scheme (EBSS), I would urge that they continue to monitor the challenges that small businesses face and seek to address the continuing shortage of skilled labour which is a very significant impediment to business growth and economic prosperity.”