Irish Businesses look abroad for growth as a third expect to increase exports and revenue from non-domestic markets
56% of Irish businesses expect to grow their revenue in the coming 12 months
New research from Grant Thornton Ireland has revealed that 76% of Irish businesses are optimistic about the outlook of the economy over the coming 12 months as domestic and international markets recover and the world reopens post-pandemic. The research carried in the first half of 2021 for the Grant Thornton International Business Report put Ireland ahead of countries including the UK, France and Germany for levels of optimism among local businesses. Ireland ranks fourth of 29 economies surveyed on business optimism and is highest of all the European countries surveyed.
International sales have been identified as key to business growth with 29% of Irish businesses focusing on their international sales strategy. More than a third (38%) expect to grow exports over the coming year and 33% expect to increase revenue from non-domestic markets. Meanwhile, 30% expect to increase the number of countries they sell to with the United Kingdom and the United States identified as countries of priority for Irish businesses. In supporting their international sales strategies, almost a fifth (19%) expect to increase their staff ratio focused on non-domestic markets.
Overall, 56% of Irish businesses expect to grow their revenue from both domestic and non-domestic markets but despite the significant levels of optimism among business, challenges to growth were also noted. In particular, 38% of businesses cited economic uncertainty as a constraint to growth.
Issues of red tape and regulation were also noted as a constraint to growth by more than half (51%) of Irish businesses surveyed. This is likely a consequence of Brexit and additional checks within Irish-UK trade, and varying requirements for Irish businesses trading in other non-domestic markets. Some 22% of Irish businesses noted an increase in the use of non-domestic suppliers and outsourcing for the coming year, with the US emerging as the main benefactor of this.
Commenting on the results Michael McAteer, Managing Partner of Grant Thornton Ireland, said: “Amid the turbulence of the COVID-19 pandemic and the challenges of Brexit, Irish businesses continue to inspire with their high levels of optimism for the coming 12 months.
‘As we watch global economies return to growth, we see the knock-on effect for businesses globally and the desire of Irish businesses to expand their offering in international markets is testament to their resilience and ambition to leverage globalisation as they would have done pre-pandemic.
'The ambition of businesses to grow is not without challenge, of course, and the course remains unsteady as we navigate through the impact of lockdowns at home and abroad in the past 18 months but many businesses will be conscious of this as they plan for sustained growth into the future.”
Investments in sustainability
Within the Grant Thornton International Business Report for H1 2021, sustainability emerged as a key priority for Irish businesses in developing future business strategy, with 30% of those surveyed noting the need to focus on developing sustainable ways in which to continue their business.
In addition to this, some 22% of businesses expect to invest in new buildings, 37% plan to invest in plants and machinery, and 32% plan to invest in research and development.
In line with economies reopening worldwide, Irish businesses are also focusing on their workforce to support their domestic and international sales strategies. 38% of Irish businesses are expecting to increase employment as society returns to normal.
The availability of skilled workers, however, is a concern for Irish businesses with 37% identifying this as a constraint to growth, and 35% of businesses planning to invest in staff skills in the coming 12 months.
Commenting on the latest research, Andrew Webb, Chief Economist at Grant Thornton Ireland, noted: ’One of the key takeaways of the report in terms of labour and employment is the need for businesses to invest in the upskilling of staff to increase the availability of a skilled workforce, as a lack of skilled staff greatly hinders the ability of a business to grow and develop in keeping with technological advancements.”