NEWS - PACE OF ECONOMIC RECOVERY WILL NOT MATCH SPEED OF DECLINE, SAYS INTERTRADEIRELAND…
Wednesday 18.11.09
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As the recession continues to bottom out, InterTradeIreland’s latest Quarterly Business Monitor - the biggest business survey on the island of Ireland - has indicated that companies are taking extra steps to improve competitiveness and stimulate demand. The survey of 1000 businesses - 500 North and 500 South - covers the period July to September 2009 and shows that there is a small rise in the number of companies reporting an increase in turnover. Nevertheless, more than half of businesses across the island (54%) recorded a fall in turnover, with similar numbers (50%) reporting a decrease in profitability. The biggest challenge to business continues to be a fall in demand for goods and services. |
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InterTradeIreland Director of Strategy Aidan Gough said: “These results confirm out the conclusions of our previous survey found that the bottom of the downturn has been reached. While there are some fragile signs of optimism, such as a small rise in the number of businesses reporting turnover increases, the pace of recovery will not match the speed of decline.” The survey indicates that these business took action over the last three months to stem the continued decline in demand for goods and services - with almost half (47%) reducing their prices to compete. This trend is significantly more common among businesses in the South (66%) than in the North (29%). As well as reducing prices for their customers, businesses scaled back on internal budgets. Marketing and advertising came off worst, with 37% of businesses reportedly reducing their budgets for this. Twenty eight per cent cut budgets for recruitment, 21% for staff training, and 18% for R&D. In addition, over half of businesses (54%) renegotiated professional fees and over two in five secured reductions in supplier costs. Wage costs have come under the spotlight too, with 45% of firms decreasing their wage bills in the last year using a variety of methods. Twenty two percent of businesses surveyed reduced their staff working hours, 21% introduced wage freezes, 18% wage cuts and 18% made redundancies. On a more positive note, however, 60% of businesses did not predict any further cuts in wage costs in 2010. “Businesses aren’t taking the recession lying down. On the one hand, they are stripping costs from their bottom line, and on the other, they are trying to stimulate demand through lowering prices” said Mr Gough. “One area in particular where Government should continue to support businesses is in tackling energy costs, cited by over one third of business (37%) as being their single most significant competitive challenge,” he concluded. |
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