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More signs of recovery on way, but there is concern over costs

Manufacturing and construction firms are leading the way in a resurgence of growth on both sides of the border, an all-island business report has stated.

InterTrade Ireland's quarterly business monitor said the last three months of 2013 saw a 30% increase in firms reporting expansion, though there is anxiety about costs.

Around 40% of firms reported growth from October to December, compared to 10% in the previous quarter.

All sectors reported growth – but manufacturing and construction had the biggest improvement in performance while retail and leisure firms lagged behind.

And the number of businesses reporting that they were winding down or fighting for survival almost halved, from 28% to 15%.

However, the increasing sense of confidence had not translated into growing employment.

Aidan Gough, strategy and policy director at InterTradeIreland, said: "There is a mood of growing optimism sweeping across businesses but it is tinged with real concerns over rising costs."

A slightly bigger percentage of southern firms (15%) were reporting rapid expansion, compared to Northern Ireland firms (12%).

The north/south differential narrowed slightly for firms in slight growth – 25% of respondents in the Republic, and 24% in Northern Ireland.

But more Northern Ireland firms (47%) reported that they were stable, compared to 44% of those in the Republic. And recovery was slower to take hold in small businesses (those with a workforce of 10 or under). Just 14% of such firms reported rapid growth, compared to 38% of those with 50 or more staff.

Energy costs remained a pressing issue for many businesses, although Mr Gough added: "It is evident that more firms are now undertaking a regular review of costs (86%) and employing a more strategic approach to managing them better.

"As a result, more businesses are taking advantage of alternative solutions, such as changing energy provider or monitoring their energy usage more carefully."

InterTrade said its survey was "the most comprehensive" on the island and was based on the views of over 750 business managers.

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