One in six small firms in Northern Ireland may downsize
Northern Ireland's small businesses are low in confidence as they head into 2016, a survey has said.
And one in six firms fear that they will contract in size during the coming year, according to the latest research from the Northern Ireland Chamber of Commerce and Industry, led by Ann McGregor.
Northern Ireland was one of the worst performing regions in the UK.
And manufacturers in the province were struggling with sales, both domestically and overseas.
But some were feeling more optimistic - and two-thirds expected their business to grow this year.
Companies told the survey that they were feeling more confident about cash flow, and were intending to take on more staff.
But small businesses were "the least optimistic" heading into 2016.
Factors such as the introduction of a National Living Wage are set to hit lower-paying employers.
According to the Chamber, one firm will add around £400,000 to their wage bill over the next four years, as a result of the increase.
According to the survey, which was carried out before the Fresh Start Agreement in November, a majority of businesses here - more than four in five - believe the Executive is holding back both international and investment from within Northern Ireland.
Christopher Morrow, policy manager for the Chamber, said while the survey "shows that businesses are trying to be optimistic about the year ahead, however there are a number of challenges facing them".
"Competition has been constantly cited as a key issue for members alongside rising costs. Northern Ireland businesses feel that they cannot be as competitive as their counterparts in other parts of the world with our manufacturers in particular suffering due to increasing costs, issues around exchange rates and global economic conditions."
The survey - which is made up of responses from more 300 firms, accounting for 22,500 jobs - also highlighted ongoing concerns about spending cuts. The services sector saw an increase in sales, both here and with exports, and fewer firms took on new staff.
Michael Jennings, partner at business advisory firm BDO, said businesses here needed "political stability" in order to grow. And he said from the firm's own experience, "our outlook may be slightly more positive" than what's reflected in the survey.
"Despite their optimism for business in 2016, many respondents do not expect the local economy to grow, noting concerns that instability in the Northern Ireland Executive is holding back business investment."
Competition among other businesses continues to be the greatest concern for businesses in 2016, with the political situation at Stormont and a strong pound also major issues for firms here.
"Proposed public spending cuts represent significant change for the local economy," Mr Jennings said.
"However, it could prove to be a valuable opportunity for the private sector to gain access to skilled labour... it is hoped the private sector will be able to absorb many of the employees being released from the public sector."