56% of southern NI businesses grew in last year but almost one-in-20 in danger of closure
56% of businesses in the Armagh City, Banbridge and Craigavon and Newry, Mourne and Down council areas report growth in the past 12 months, with 64% forecasting growth in the 12 months ahead, the results of the NI Enterprise Barometer 2024 have revealed.
However, optimism around turnover is tempered by increasing pressures on profitability, as almost one-in-20 businesses said that they are in difficulty and/or at risk of closure amidst rising costs, skills shortages, and operational challenges.
The NI Enterprise Barometer is the annual survey of the region’s small, micro, and self-employed businesses commissioned by Enterprise Northern Ireland now in its sixth year.
The Barometer found that 43% of NI businesses report growth over the last 12 months, placing the southern region far ahead of the NI average.
34% of southern businesses reported stable operating conditions, one percentage point below the NI average of 35%, but just 4% reported contracting performance, eight percentage points below the NI average of 12%.
The proportion of businesses at risk of closure was almost half the NI average of 10%, coming in at 6%.
Expectations for the next 12 months are markedly optimistic in ABC/NMD, with 64% of businesses expecting growth, three percentage points above the NI average of 61%. 32% predict stable performance, five percentage points above the NI average. 2% and 2% predict that they will contract or be at risk of closure respectively, compared to averages of 7% and 5%.
80% of NI businesses are prioritising growth within Northern Ireland, with the Republic of Ireland the most popular destination for NI businesses hoping to grow sales.
47% of businesses stated that they are hoping to grow sales in the Republic, followed by 39% for Great Britain, 22% for the rest of the EU, and 20% for other international markets.
However, this optimism is tempered by rising costs, skills gaps and vacancies, and technology and productions issues.
Across Northern Ireland, 88% of businesses state that the cost of raw materials has risen (with 55% stating that it has risen by more than 10%), and more than half of businesses report rising costs in state utilities (87%), vehicle running costs (85%), and the cost of borrowing (55%).
Three in four businesses have also seen wages increase over the last year, with 38% of wage costs having increased by more than 10% and 11% having increased by 30%.
Locally, 17% of ABC/NMD businesses state that the cost of doing business is an issue at present to a large extent (compared to an NI average of 24%), and 53% of ABC/NMD companies state it is an issue to some extent, compared to an average of 54%.
18% of ABC/NMD businesses report vacancies, compared to an NI average of 32%. 86% of those with vacancies state that they have proved difficult to fill, compared to an NI average of 72%. 36% and 28% of local companies find it difficult and very difficult respectively to access the right skills development, compared to averages of 36% and 19%.
Minister for the Economy, Conor Murphy MLA said: “Since the publication of the last Barometer, the Executive has been restored, I have set four economic priorities, and my Department has recalibrated its activities in line with these.
“I’ve established a dedicated £12 million Skills Fund, new Local Economic Partnerships are being set up at pace and Invest NI is being reformed.
“My economic plans are now contained within the draft Programme for Government, meaning that the whole Executive is behind one economic agenda.
“So, things are moving at pace and I’m pleased to say that this year’s barometer points to a positive economic outlook, whilst recognising there are challenges. This resonates with my own engagements with the business community.
“We will feed this information into our policies and budgets for the coming year and we will continue to work with Enterprise NI to ensure that the necessary support is in place for our entrepreneurs and small business owners.”
Maureen O’Reilly, Lead Economist, NI Enterprise Barometer, said: “The richness and depth of the Barometer offer us a unique longitudinal analysis of Northern Ireland’s economy.
“While the resilience of our business community is evident, the fragility of profits – aggravated by rising costs – cannot be ignored.”
Michael McQuillan, Chief Executive, Enterprise NI, said: “It is critical that councils, Invest NI, Enterprise NI, Local Enterprise Agencies, and the Department for the Economy work in concert to deliver targeted support where it is most needed.
“The increasing pressure on profitability requires us to act decisively to sustain the growth and resilience of our local businesses.
“Efforts should focus on delivering accessible, tailored services that help businesses manage costs, enhance productivity, and retain profitability.
“The voices of local businesses, as captured in the Barometer, provide a clear roadmap. We must now respond with urgency and unity.”
