Businesses unhappy with new Administration performance.
Least satisfaction with Government’s handling of business costs.
Jobs Single digit rating only positive score.
ISME, the Irish Small & Medium Enterprises Association, has published the results of its latest Government Satisfaction Survey* today (13th July) for the second quarter of 2016. The results show that SMEs overall satisfaction with the Government performance had decreased once again. This survey is the first since the recent election and so reflects the view of the SME community in relation to the new administration’s initial performance, showing the Government’s message isn’t resonating as strongly as it would like.
ISME CEO, Mark Fielding, commented on the results, “After seeing an improvement in perceptions over the last year, we now see that small business operators are feeling less supported by the Government. In Q1 the results showed a frustration with the previous Government and its efforts to form an administration. The results of the Q2 survey show a continued deterioration in overall satisfaction with government, the lowest in two years, albeit that they have been skewed somewhat by the results of the UK Brexit vote”.
“The new Government’s handling of Business Costs and Banking are by far the lowest satisfaction ratings at -65 and -49, both showing the least improvements in the indicators. The significant cost increases in insurance, transport and legal fees adding to the overhanging threat of industrial unrest are reflected in the ratings.”
The survey was conducted in the first week of July, with 945 SME respondents. 54% of whom employ less than 10, while a further 36% employ between 11 and 50 and the remaining 10% employ between 51 and 250. Geographically, 34% are from Dublin with 66% spread across the country, with 13% having multiple sites, giving a good reflection of the country as a whole; sectorally, geographically and by employee numbers.
COMBINED RATING (-6 to -12)
The overall satisfaction rating has decreased for the second quarter, dropping 23 points in six months. All enterprises express dissatisfaction with government; micro enterprises -14, small enterprises -17, while medium enterprises show the biggest level of dissatisfaction at -19. Hospitality and Distribution are least satisfied at -40 and -23 respectively, while Construction is most satisfied at +12. Retail is at a -15 satisfaction level and Services are at -14, a drop of -13 on previous quarter.
JOBS RATING (+3 to +7)
The satisfaction on jobs has been the most positive trend of all ratings. After a 19 point dip in Q1, there has been a marginal increase of 4 in satisfaction ratings, which is a welcome figure. Medium business at +10 and Micro at +8 were most satisfied while Small businesses here again are least satisfied at +1, as they come to terms with the increase in the National Minimum Wage.
BANKING (-56 to -49)
The banking score has been persistently in the negative. In this quarter it has improved slightly by 7 points from -56 to -49. SME access to finance is incrementally improving but the figure of 35% refusal rate is still far too high. Small businesses are again most dissatisfied at -54, with Micro and Medium scoring -46 and -43 respectively. This new administration must ensure that finance and credit is available to SMEs in order to stimulate growth in the indigenous economy.
ECONOMY (-2 to -7)
This quarter shows another decease in satisfaction with government’s handling of the economy down from -2 to -7, a decrease of 5 points. This drop was expected given the recent prolonged formation of an administration and the initial reaction to Brexit. The decline in competitiveness is also a concern and businesses are becoming increasingly frustrated with Government inaction in this area.
BUSINESS COSTS (-57 to -65)
By far the most dissatisfaction is felt in the area of government’s efforts to reduce business costs. For the third quarter in a row we see a drop in satisfaction ratings. Services and Retail record levels of dissatisfaction at -74 and -63 respectively. While satisfaction in the Construction sector is at -44. The issue of high business costs is a key concern for ISME members. The Association is concerned that in light of the Brexit result our competitiveness will come under pressure. We reiterate our call for the Government to conduct a review of all business costs to bring them into line with our main export competitors.
“Understanding business needs should be the starting point for enterprise policy. This survey identifies the areas of greatest dissatisfaction and it is now up to the new administration to implement targeted initiatives for improving the business environment. Issues such as increasing business costs, access to finance, poor broadband and late payments must be addressed if Irish SMEs are to have a hope of surviving”, concluded Fielding.