SMALL businesses have a cautious outlook to 2017 with the mood reflecting the uncertainty that the next 12 months has amid Brexit and the change of leadership in the US.
This week, the Small Firms Association (SFA) found in its ‘Small Firms Outlook 2017’ survey report that 50 per cent of owner-managers feel that the business environment is improving.
However this figure is down from the 2015 number of 77 per cent and 2016s half yearly report of 66 in May. 18 per cent of those businesses surveyed felt that the economy is disimproving.
Patricia Callan, SFA Director, said “2016 has been a challenging year for small business. The optimism that existed at the beginning of the year has given way to a much more cautious sentiment among small businesses, due to emerging wage demands, Brexit and downward revisions of growth forecasts. Still, 52 per cent of SFA members say their businesses are growing, with only 9 per cent declining. This shows that 2017 still has the potential to be a strong year, if the risks are managed effectively at firm level and Government level.”
Asked what they see as the biggest opportunity for their business in 2017, domestic economic growth was highlighted by 32 per cent of businesses. Other positive factors included specific sectoral opportunities, bringing new products to market, new brand/marketing campaigns and exporting.
One in three of survey respondents indicated their intention to recruit over the coming year, down slightly from a pre-Brexit survey in May. This strong job creation outlook was welcomed by Ms Callan.
“Small firms already employ over half of the private sector workforce and almost two-thirds of our members will be hiring in 2017. Small firms have a crucial role to play in job creation around the country, reducing unemployment and attracting emigrants home to work.”
The survey results, however, highlight a number of areas of concern for small firms. Ms Callan continued, “A number of risk factors for 2017 have been highlighted. These include wage inflation (#1 at 22 per cent), Brexit/Sterling exchange rate, domestic economic stagnation and cashflow issues. Many of these require decisive measures at Government level and the SFA will work with the Department of Jobs, Enterprise and Innovation and other departments to ensure the appropriate actions are taken.”
In conclusion, Callan stated, “The fundamentals of the Irish economy are strong and economic growth and job creation are forecast to continue in 2017. If the specific concerns of small businesses are addressed, 2017 will be a very positive year for the sector, allowing the small business community to fulfil its potential in terms of job creation, enhancing local communities and driving economic progress. The Government must put small business at the heart of its policies by embracing the ‘Think Small First’ principle and ensuring that all policies are job-proofed.”