SMEs more confident about prospects in 2010 than last year

Senior executives in Ireland’s Small and Medium Sized Enterprises (SMEs) are more confident about their prospects in 2010 than they were about facing into last year according to the annual O2 business survey.

The number who are more confident about the New Year has more than doubled from 12% last year to 26%. There has been a steep decline in those who are less confident, from 59% last year to 26% now.

The survey, which was conducted for O2 by market research company Behaviour & Attitudes, surveyed over 300 owners or director level executives in organisations employing between 1-250 people nationwide.

'The study finds that while companies continue to face serious challenges in terms of sales, cash flow and competition, there appears to be the start of a recovery in confidence levels,' commented Alan Brown, Business Sales Director - Telefónica O2 Ireland.

He said that this uptake in confidence may be in part due to the fact that the majority (57%) believe that the global recession has bottomed out. However, just 23% say the Irish recession has bottomed out. 62% believe it has not.

On the jobs front the outlook appears neutral with 17% expecting to increase recruitment, similar to the number (15%) that predict a decline in headcount. The majority (67%) expect to maintain employment at the same level.

A third (34%) of Irish SMEs expect revenues to rise in 2010, up from a quarter (24%) last year. 42% expect revenues to remain the same while a quarter (24%) predict a decline in sales. Last year over a third (36%) expected revenues to fall.

'Irish SMEs have proven themselves to be very resilient,' added Alan Brown. 'The survey suggests that owner managers believe that if they can get through last year when the Irish and global economies were in severe decline then 2010 has to be better as the world economy recovers.'

Generating sales was listed as the main challenge by 25% of companies surveyed followed by cashflow (23%) and increased competition (14%).