In the last six months, 77 per cent of small businesses have seen costs increase, with staff costs most frequently noted as a cause, a survey has found.
Small practices said they found coping with staff costs more challenging than their larger counterparts, with half of respondents noting it as the single biggest financial issue against an average of 37 per cent, according to the small and medium enterprise (SME) business sentiment survey. .
The survey, conducted by Chartered Accountants Ireland (CCI) and business lender, GRID Finance, found that operation costs (24 per cent) and the costs of regulatory compliance (at 14 per cent) were the other largest financial challenges.
The chief executive of GRID Finance, Eoin Christian, said this aligns with prior research, which found that “rising costs, particularly staff-related expenses are creating significant pressure on Irish SMEs”.
Nearly three-quarters (74 per cent) of small businesses are less optimistic about the economic future than they were six months ago, with 62 per cent of respondents reporting that their business operations have been impacted by global trade tensions or tariffs.
Only 14 per cent of SMEs feel prepared for a further escalation of tariffs, and 36 per cent of respondents forecast their business being worse off this time next year.
Against this backdrop, 28 per cent of small and medium size businesses reported increased profitability in the last six months, but nearly the same number, 26 per cent, reported that profit had decreased. Within that sample, smaller scale companies saw greater stability, with more than half of respondents noting profitability had remained the same as the year prior.
Just 40 per cent of respondents feel adequately informed about auto-enrolment, which comes into effect in January 2026.
CCI’s director of members and advocacy, Cróna Clohisey, welcomed the decision to defer the launch of the process until the new year “particularly in view of the feeling of unpreparedness many businesses expressed in this survey”.
“Many remain very unclear as to what is expected of them in advance of the new system launching,” she said, calling for the Government to conduct an awareness campaign to address the “information deficit”.
Ms Clohisey also raised an “evident mismatch between the need for supports and the uptake of those on offer” highlighted by the findings of the survey.
While 40 per cent of SMEs had called for the introduction of tax relief and incentive schemes, just 16 per cent of respondents had availed of them. A similar gap existed with help meeting energy costs among the nearly 300 respondents from organisations with fewer than 250 employees.
