Businesses under pressure

Businesses under pressure

Regus, the world’s largest provider of flexible workplaces, has published its seventh global Business Tracker report showing that Irish business confidence fell 13% in the six months to April this year and declined a further 3% between April and October.

The report includes an updated Business Confidence Index and gives Ireland a confidence rating of 85, significantly behind major Western economies such as the UK (94), the USA (107) and Germany (124). Only 25% of companies reported profit growth in the six months to October.

These findings chart the reversal in business outlook since October last year, when the Business Tracker showed Irish recovery to be well under way. Irish firms rated 101 in the Business Confidence Index, ahead of the UK and US, with nearly half of firms reporting a rise in profits.

Regus’ latest report also highlights that less than two fifths (39%) of respondents from Ireland’s small and medium-sized enterprises are happy with the Government’s attempts to stimulate the economy.

Three quarters of SMEs pinpointed cash-flow as their biggest concern, followed by finding new customers (46%) and late payments (31%).

Olivier de Lavalette, Regional Vice President for Ireland at Regus comments: “Ireland’s small business owners are sending a clear message to the Government: they don’t have much faith in the current policies to stimulate the economic growth which is so badly needed. Given the important role of SMEs as a motor of growth and provider of jobs, this finding is of particular concern.

“There’s been a marked deterioration in business confidence over the last year, although the decline seems to have slowed down in the last six months. We were particularly struck by the decrease in confidence amongst entrepreneurs and small businesses. With three quarters of respondents stating cash flow as the major issue preventing growth, I urge smaller companies to look in detail at all overheads to find savings that can improve their cash situation. Over half of respondents, for instance, reported that one of the major burdens during the downturn were property leases. Moving to a flexible work model without a fixed property lease can allow businesses to be more agile and free-up cash for investment without relying on credit at a time when it is so difficult to secure.”Graph or table of statistics available on request.