Small and medium firms have revealed their outlook for 2006 is positive however, they are worried at cost increases particularly in areas under government control.
A Chambers Ireland/Irish Examiner SME Business Confidence Survey published today shows that small and medium sized enterprises (SMEs) are positive regarding their activities in 2005 and upbeat about the business environment for 2006.
However, they cite rising costs as the number one threat to business in the coming year.
The chief executive of Chambers Ireland, John Dunne, said, "contrary to perceptions among some commentators, 70 per cent of respondents have stated that labour costs were one of their most rapidly rising business costs in 2005.
"This and other increasing costs such as energy, insurance and local authority charges, are overshadowing the otherwise positive outlook of SMEs for the year ahead," he added.
Energy was cited as the second most is the second most commonly occurring cost in the top four rising business costs, with insurance third on the list.
Over 40 per cent of businesses anticipate an increase in prices to tackle these rising costs, while just under a third of SMEs said they would absorb these additional costs as opposed to passing them on to their customers.
• Employment projections for 2006 are conservative, with 67% of businesses predicting their workforce size will remain unchanged. Only one in twenty envisage a drop in staff numbers in 2006, compared to 28% who expect the size of their workforce in 2006 to increase.
The investment outlook for 2006 is very much in line with the figures for 2005, with 54 per cent of companies estimating similar investment levels in 2006 as in 2005. 36 per cent of businesses expect investment levels in 2006 to grow, with 7 per cent expecting them to fall.