Irish SMEs say profits are now flat or falling as inflation bites

Almost 70 per cent of Irish SMEs said their profitability was either flat or down in the third quarter of this year compared to last year.

Results for the third quarter of this year are included in the latest Linked Finance SME Confidence Index, based on research from Behaviors & Attitudes.

Linked Finance noted that general business optimism among Irish SMEs waned in the third quarter of the year but remained positive.

Inflationary pressures are forcing companies to pass on higher costs to consumers as 41 percent of companies say they charged higher prices in the third quarter, up from 30 percent in the third quarter of last year.

However, despite higher prices, 68 percent of the SMEs surveyed said they were achieving the same or lower profitability than in the third quarter of 2021.

More than a third of Irish SMEs said they plan to invest in energy efficiency measures in the coming year to combat rising energy costs.

Inflationary pressures are forcing companies to pass on higher costs to consumers

Linked Finance CEO Niall O’Grady said the alternative lender has already seen an increase in corporate borrowing for quick financing to invest in energy upgrades to counter rising energy bills.

“As inflationary pressures hit businesses with rising input costs in areas like materials, rent and food, the real sticking point is the rise in energy costs,” he said.

Responses also showed that just over a third of companies cited higher year-over-year activity in the third quarter. However, that was a significant drop compared to the same period last year, when more than half of companies expected higher activity.

Despite some concerns raised by Irish companies in the survey results, O’Grady pointed out that most of the SMEs surveyed are still positive.

“As we have seen in other economic challenges, Irish SMEs are demonstrating a strong ability to be agile and dynamic to weather the current storm. Businesses are trying to stay ahead of rising costs and this has resulted in a positive outlook for the rest of the year.”

https://www.independent.ie/business/irish/irish-small-and-medium-firms-say-their-profits-are-now-stagnating-or-falling-as-inflation-bites-42209341.html Irish SMEs say profits are now flat or falling as inflation bites

Fry Electronics Team

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