99% of Irish businesses are SMEs
SMEs accounted for almost all businesses in the Republic in 2010 but generated just half of turnover, according to a new analysis from the Central Statistics Office.
The Business in Ireland 2010 study also found that SMEs, which represented 99.8 per cent of enterprises, accounted for 46.8 per cent of gross value added, a key measure of business income.
The CSO defines an SME as a business employing fewer than 250 people. Numbers employed in SMEs fell by almost one-fifth to 854,500 between 2006 and 2010, with 115,000 job losses in construction having the biggest impact by far. The CSO found that 81 per cent of turnover in construction in 2010 came from SMEs, which provided 95.3 per cent of employment in the sector.
A breakdown of the data shows that the electricity, gas, steam and air conditioning supply sector was by far the most profitable in 2010, recording a 31.8 per cent operating surplus.
The next most profitable was real estate with a 24 per cent surplus, while the motor trade was the least profitable with a 2 per cent surplus. Construction had a surplus of 8.4 per cent.
Average profitability was a 14.5 per cent surplus, but this dropped to 8.9 per cent when foreign multinationals were excluded. Reinforcing this, the CSO found that, in 2009, Irish businesses excluding finance had the highest profitability in the EU, apart from Cyprus, but fell below the EU average when multinationals were excluded.
Productivity per person in Irish business was the highest in the EU in 2009 but, again, fell closer to the average when multinationals were removed.
The CSO has also, for the first time, taken a snapshot of the activities of Irish multinationals and their activities abroad. It found, in 2010, Irish multinationals employed almost 249,000 in foreign affiliates, generating turnover of €71.9 billion. Foreign multinationals, by comparison, employed almost 257,000 in the Republic, producing turnover of €162.4 billion
When these foreign-owned multinationals are included, Irish businesses as a whole generated a turnover of almost €261,000 for each person engaged; this fell to €155,000 for indigenous businesses.
Productivity per individual was just under €32,000 for the smallest businesses and €133,000 for the larger entities. Excluding multinationals, the figure for the latter dropped markedly, falling to €72,000.