| 21°C Belfast

Half of firms battle for their survival

Nearly half of businesses in Northern Ireland and the Republic are contracting, fighting for survival or in the process of winding up, according to a new survey.

The IntertradeIreland Business Monitor, which interviews a total of 1,000 businesses across the island, found 62% of companies in the construction sector are in such a position while retailers and small companies are also bearing the brunt of the downturn with around 50% of each shrinking or winding up.

And nearly 40% of businesses reported a drop in sales during the first quarter of 2013, with only one in five experiencing sales growth.

"This marks a fall on the figures for the previous quarters and shows how sluggish demand remains," the Business Monitor report said.

"One notable feature is the convergence between Northern Ireland, where 20% of businesses are reporting an increase in sales, and Ireland, at 19%, something which has developed strongly over the past year."

Once again it's the construction industry, along with the hotel sector and companies which don't export, which are experienced a bigger drop in sales in the first quarter.

The survey found costs are a "huge issue" for 40% of companies while late payment is also an issue with a third of firms reporting they're not paid on time, with 19% having debtors which are over 90 days in arrears.

Weekly Business Digest

Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning

This field is required

Surprisingly, more than half of businesses have no system for managing business debt with most relying on invoices and the "selective use of credit".

Offering some solace is the employment arena.

"Just over one in 10 firms reported that they had decreased the size of their workforces in the previous quarter. This figure is lower than it has been for several years," the survey said.

Still, only 4% of firms added to their employment base.

Aidan Gough, InterTradeIreland strategy and policy director, said further unemployment increase may be off the cards.

"The number of companies reporting reduced numbers of staff has remained fairly static over the last four quarters and this trend may indicate that the level of unemployment may have peaked," he said.

"This would seem to be supported by the announcements last week of more than 1,000 new jobs for Northern Ireland.

"These kinds of announcements can help with the confidence of firms to hire new people and we could then start to see the figures for unemployment reverse."

62%

Irish construction firms who are currently fighting to stay in business1,000

New jobs announced in Northern Ireland last week


Privacy