- by Christine Cullen on 23/10/2017
Vision-net research shows that two-thirds of business owners think that doing business today is more expensive than it was before the crash.
Higher employee salaries and insurance premiums are squeezing cash flows, meaning most businesses must forego long-term investment. Three-quarters believe that costs have risen over the last twelve months and will continue to do so into the future.
More than half of business owners say that tighter purse-strings have forced them to divert money to their overheads and away from company and employee investment. This trend isn't good for Ireland's sustained economic growth or innovation.
With bills to pay, it's understandable that a distant geopolitical affair like Brexit is a low priority for many senior managers. In fact, only a minority feel that it will have any effect on their business. This means that few have contingency plans in place in case the UK departs the EU without a trade deal (which looks increasingly likely) or if new tariffs and regulations are introduced that negatively affect Irish exports.
This complacency could prove fatal. In the immediate aftermath of the British referendum last June, Ireland's mushroom exporters, reliant on the UK market for as much as 80 percent of their exports, took a massive body blow. Unable to cope with wild sterling fluctuations, ten percent of all mushroom farms closed within four months.
Other industries, like hospitality, are similarly exposed?more than 40 percent of all visitors to Ireland are British. With less money in their pockets, British tourists are more likely to holiday at home or elsewhere in Europe.
Against this backdrop, the Government's decision to introduce a new Brexit Loan Scheme is welcome, and if rolled out successfully, could help businesses free up capital for much-needed investment. However, other measures, like the increase in commercial stamp duty, will contribute to rising costs that may dissuade developers from expanding their businesses or initiating new projects.
Brexit is still the great unknown. While many businesses will be spared the worst of the fallout, having some sort of a plan, even if only for a worst-case scenario, is always preferable to none.
The key points and findings of our surevey are included in our Infograhic below:
2 out of 3 businesses say their costs are higher today than pre-recession levels. The Vision-net 'Cost Of Doing Business Report', highlights the increasing trend towards rising business costs.
A breakdown of the key trends affecting Irish companies between January and June 2017