Businesses Report Growth But Many Concerned About Future Profitability

The following report will either fill you with optimism or dismay you, depending on whether you are a half pint full or half pint empty type of person! On the one hand the latest report by the NI Enterprise Barometer 2024 has found that over 60% of NI businesses are forecasting growth over the next 12 months.

But on the other hand the report finds that there are many businesses who are very concerned about the future profitability of their business. Furthermore 1 out of 10 businesses surveyed said they were in financial difficulty due to the issues of rising costs, skill shortages and operational challenges.

Expectations For Next 12 Months Markedly More Optimistic

Here is some of the data analysis from the report, as copied from an article on the Business Eye website. The report found that:

‘43% of NI businesses report growth over the last 12 months, with 35% reporting stable conditions, 12% reporting contracting performance, and 10% stating that they are in difficulty/at risk of closure. While the 43% of businesses experiencing growth marks a 1% decrease from 2023, expectations for the next 12 months are markedly more optimistic, with 61% of businesses expecting growth, 27% expecting to remain stable, and just 7% and 5% expecting to contract or be in difficulty/at risk of closure respectively.

‘80% of businesses are prioritising growth within Northern Ireland, with the Republic of Ireland the most popular destination for NI businesses hoping to grow sales. 47% of businesses stated that they are hoping to grow sales in the Republic, followed by 39% for Great Britain, 22% for the rest of the EU, and 20% for other international markets.

‘However, this optimism is tempered by rising costs, skills gaps and vacancies, and technology and productions issues. 88% of businesses state that the cost of raw materials has risen (with 55% stating that it has risen by more than 10%), and more than half of businesses report rising costs in state utilities (87%), vehicle running costs (85%), and the cost of borrowing (55%). Three in four businesses have also seen wages increase over the last year, with 38% of wage costs having increased by more than 10% and 11% having increased by 30%.

‘32% of businesses report vacancies, an increase on the 27% of 2023. 55% of businesses state that the appropriate skills for their business have been difficult to find, with one in five finding it very difficult. 47% say that they do not know where to access skills support, a decrease from 53% in 2023. The highest skills development gaps were found to be: marketing and communications (54%); sales, exporting and business development (43%); market/customer research (31%); managing finances (28%); and understanding and embracing artificial intelligence (27%).

‘While 30% of businesses rate their productivity as very good or excellent, businesses do report concerns, with 40% calling their operating efficiency satisfactory/poor and 30% rating their technological adoption as satisfactory/poor.’

Four Economic Priorities Set Out

In the same article here is what Minister for the Economy Conor Murphy MLA said about the report:

“Since the publication of the last Barometer, the Executive has been restored, I have set four economic priorities, and my Department has recalibrated its activities in line with these. I’ve established a dedicated £12m Skills Fund, new Local Economic Partnerships are being set up at pace and Invest NI is being reformed.

“My economic plans are now contained within the draft Programme for Government, meaning that the whole Executive is behind one economic agenda. So, things are moving at pace and I’m pleased to say that this year’s barometer points to a positive economic outlook, whilst recognising there are challenges. This resonates with my own engagements with the business community.

“We will feed this information into our policies and budgets for the coming year and we will continue to work with Enterprise NI to ensure that the necessary support is in place for our entrepreneurs and small business owners.”

We prefer to look on the bright side of life and believe that there is a bright future ahead for businesses and Northern Ireland as a whole.