Stability not scale, defines SME mood across the island
InterTradeIreland’s latest All-Island Business Monitor points to a marked shift in sentiment with firms across the island increasingly prioritising consolidation over expansion.
Drawing on insights from 750 companies, the largest continuous survey of its kind, a clear picture emerges. Operational stability isn’t just a priority; it’s defining aspiration. When asked to look ahead to 2026, most businesses aren’t gearing up for bold expansion but instead tightening their grip on what they’ve already built. Nearly seven in ten aim simply to hold their current performance, while 36 per cent are setting their sights on growing turnover.
InterTradeIreland’s Director of Strategy, Martin Robinson notes the recalibration:
Comparing last year’s aspirations with those for 2026, it’s clear that while ambition has not completely disappeared, firms appear to be taking a more protective stance as they look ahead. It’s notable that when asked, just over 20 per cent aspire to improve profit margins while very few are planning to increase headcount at just 6 per cent.
While the Q4 2025 All-Island Business Monitor shows that workforce expansion plans have cooled, it also reveals that skills availability remains a constraint in several sectors, meaning that even firms looking to grow can face recruitment difficulties.
The survey shows that investment intentions are also becoming more selective, with fewer firms planning major capital expenditure in the year ahead. Again, this highlights the emphasis on maintaining existing operations and protecting their position rather than committing to significant new expansion and growth.
The number of SMEs reporting that their business performance is stable is at a record level of 65 per cent, while only a quarter are in growth mode.
Cross-border traders and exporters are more likely to be growing. Minister for Enterprise, Tourism and Employment Peter Burke TD highlights the strategic importance of this:
Exporting remains critical for business growth. The All-Island Business monitor underscores the untapped potential of the cross-border market and the all-island economy, and my Department is committed to supporting indigenous SMEs through initiatives such as the Get Exporting programme.
Beyond sales growth, the All-Island Business Monitor also highlights scope to strengthen supply-chain linkages across the island. While cross-border trading is well established, it is not universal - 22 per cent of firms in Ireland and 28 per cent of firms in the North source goods/services across the border. Many SMEs acknowledge that more could be procured on-island.
Robinson adds that this represents a clear avenue for indigenous business development:
Even in a period of consolidation, the all-island economy offers substantial potential for growth. 62 per cent of firms in the North and 38 per cent of firms in the South say products and services could be sourced on the island. Deepening these linkages builds resilience, prosperity and enhances capability. InterTradeIreland will shortly launch a programme designed to help SMEs strengthen their on-island supply chain connections.
According to the All-Island Business Monitor, exporters and cross-border traders show stronger performance and are more optimistic about future growth. Among firms already engaged in cross-border trade, over three quarters would recommend it as a stepping stone to exporting further afield.
The survey also points to some differences in trading orientation between the two jurisdictions. Within the sample, firms in the North appear somewhat more externally focused, with 29 per cent reporting cross-border sales compared with 18 per cent in the South. While the majority of firms in both markets remain domestically focused, this suggests a modestly stronger interest in the cross-border market among SMEs in the North, consistent with its smaller regional market base.
Economy Minister Dr Caoimhe Archibald MLA emphasises the importance of supporting exporting:
SMEs are the backbone of our economy, and at a time when many firms are focused on stability, the cross‑border marketplace continues to offer a valuable route to sustainable growth. Cross‑border trade in goods and services is now valued at £12 billion, and 81 per cent of that trade is carried out by SMEs. With the depth of the all‑island economy, my Department is committed to helping SMEs strengthen their supply‑chain links and make greater use of the opportunities in the cross‑border market, including the significant potential to source more on‑island, enabling businesses to reach new customers, reduce risk and build long‑term resilience.
