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Economic recovery on track despite challenges

1 Nov 2021

InterTradeIreland’s latest Business Monitor reveals that the wider economy is within touching distance of recovering to pre-pandemic levels, despite significant issues and specific sectoral challenges.

The vast majority of firms are in stable or growth mode (81 per cent), with cross-border traders in particular leading the way forward. Businesses that trade with the opposite jurisdiction are seeing a quicker return to profitability than those with no export sales, and they are experiencing faster sales growth. Close to half of SMEs (46 per cent), that trade across the border are reporting sales have increased this quarter compared to 35 per cent of their non-exporting peers.

InterTradeIreland’s Acting Director of Strategy and Policy, Kerry Curran says, “Consistently SMEs that export out-perform their non-exporting peers. While Covid-19 is still casting a long shadow, in particular for pockets of the leisure sector, the impact of the pandemic has lessened slightly as both economies have started to open up again. 65 per cent of firms cited the pandemic as the main issue this quarter, compared to 78 per cent in the previous quarter.”

“There are also a number of other issues that are starting to weigh heavily on firms. The rising costs of overheads, increasing energy bills, the impact of Brexit and recruiting the correct skills are all issues for businesses. Rounding out the top six worries for firms are concerns over logistics.”

This quarter more businesses are reporting they are sourcing supplies across the border from the opposite jurisdiction, with close to a third in this bracket (32 per cent), compared to 19 per cent in Q3 2019. The business monitor also reveals that 60 per cent of firms now source outside their locality generally compared to 42 per cent in 2019.

Post-Brexit, the number of firms who say they have taken steps to adapt to the new landscape is very heartening. Over 80 per cent of businesses who report they’ve been impacted by Brexit, state they have adapted to some extent to the new trading relationship – in fact, within that figure over a quarter say they have adjusted in full.

However, as Kerry Curran points out there is still a significant issue around the number of firms exporting generally. She says, “Three quarters of firms are still not exporting and that remains a challenge for the economies on the island. For firms to see real, sustained growth they need to find new markets. InterTradeIreland has a number of supports in place to help SMEs take their first export steps on the island.”

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