88% of respondents considered that there had been an adverse impact on their business to date with regard to the impact of the economic downturn. 47% said there had been a moderate adverse impact and a further 41% said the impact had been severe. Just 4.5% considered that there had been a positive impact from the economic downturn and 7.5% saw no impact at all.
Expectations for business turnover are not especially positive with just under one quarter of respondents expecting business turnover to be better over the coming months (23%). 41% of respondents considered their expectations for business turnover to be about the same as the previous six months, with a further 36% expecting business turnover to be worse over the coming months. Bank credit remains a massive issue with 36% of those surveyed saying the availability of credit has got worse in the last six months.
According to Michael Tunney Chairman of the CEB Network, “As well as they hard numbers we also asked for views from the respondents on how they were coping. Most telling were comments regarding the difficulties of getting credit from the banks. Sample of comments includes, “Bank trying to change the terms of a bank loan”, “The main problem with credit is that my clients can’t get it. Therefore they can’t pay me and debts are outstanding for over a year”, “I wish to expand and feel that the lack of credit or loan facilities may curtail that expansion”, “Banks took months to open a current account, takes weeks to answer any type of question regarding loans. They never put anything in writing but after your have chased them enough and they seem to realize you are not giving up, they would call you and on the phone would say no to the application, making sure they come through as aggressive and rude as they can so that you think twice to ask for other things.” Mr. Tunney said, “The banks’ approach continues to restrict business. The banks say they are lending. As a State agency with no vested interest we can say that this is not the experience of our clients. The absence of credit is the major issue. If there were credit facilities available we are confident that the small businesses we assist on a daily basis can create employment immediately. These people are our business athletes but they are not being allowed to run the race.”
According to the CEB survey the singular most important issues/challenges facing businesses are:
1. Increasing business turnover
2. Continued demand for goods and services
3. Manage cash flow
4. Access to credit
5. Increase in order book/customer base
6. Develop/launch new products/services
7. Business/consumer confidence
8. General economic uncertainty
29% of respondents say that their business is at risk, the same level as indicated in the CEB Survey six months ago. This may indicate either a resilience/stabilisation in CEB client businesses but could also mean that a number of businesses have already ceased trading in the past six months. As the survey is anonymous it is not possible to see if previous respondents have ceased business.
Employment continues to be at risk in respondents’ businesses with 43% considering employment to be at risk in their business over the coming six months. This is a drop from six months ago when 57% of respondents considered employment to be at risk. This again may indicate some resilience of CEB client businesses when it comes to making people redundant but may also be interpreted that staff have already been let go in the intervening six month period, or that some businesses have ceased trading altogether.
Banking/Credit Issues:
This online survey was conducted amongst clients and contacts of the County and City Enterprise Boards (CEBs) during July 2010. The main objective of the survey was to ascertain how confident CEB contacts/clients were in the present economic climate and also whether they were experiencing difficulties accessing credit (and whether there had been any significant changes on accessing credit since the previous study conducted six months previously). A good response level of 1,615 responses was achieved from across the CEB network. Many of the questions asked in relation to general business confidence are new to this survey whereas many of the banking/credit issue questions had been asked in previous surveys, thereby enabling some comparisons/trends to be identified.
The full survey is available on the CEB website at www.enterpriseboards.ie