More than two-thirds of Irish companies selling overseas have grown exports this year but labour-related costs and finance issues are still causing difficulties for firms, according to a new survey.
The study, which was conducted by the Irish Exporters Association in association with Grant Thornton, shows that 71 per cent of exporters have reported a rise in exports during the course of 2014, compared to 62 per cent for the same period a year earlier. In addition, almost 85 per cent of firms surveyed said they expect exports to rise in 2015.
The food and drink sector forecasts that the volume of exports will increase by 20.2 per cent in 2015 and record a cumulative rise of almost 42 per cent by 2020.
The study reveals that more than 80 per cent of exporters said they had invested in product/service development over the past two years. Almost half also reported an increase in R&D spending this year compared to 2013.
About three-quarters of survey respondents said they have targeted new markets this year, compared to 69.7 per cent in 2013 and 71 per cent in 2012. However, the survey shows the proportion planning to target the BRICs (Brazil, Russia, India, China, and South Africa) economies falling from 26.8 per cent in 2013 to 10.6 per cent this year.
Over the medium term, opportunities to develop export activities were seen to be strongest in traditional markets such as the euro zone, the US and the UK. Exporters reported a mixed experience in new regions with those entering the Chinese, Russian and Indian markets reporting difficulties in getting established.
Exporters said that while access to finance has improved, many are still experiencing problems with a quarter of respondents saying they were required to give a personal guarantee when seeking loans from banks.
The majority of exporters who said they had experienced a rise in costs reported significant increases in excess of the average rate of inflation in Ireland or among our main trading partners.
Labour costs were also noted as an issue for many companies with 25 per cent of exporters ranking it as the biggest expense, followed by energy costs.
“It is not surprising that labour related costs and access to finance remain the dominant challenges in this year’s survey. These are of major concerns for exporters and the IEA continues to lobby government with regards to the frustrations of our members,” said Simon McKeever, chief executive of the association.
“While the UK and US are important markets, growth in the euro zone, where over 40 per cent of our exports go, remains increasingly uncertain. We must do more to diversify our export risk to focus on new and higher growth markets. However, without the necessary supports in place our ability to compete globally is capped - we must first overcome existing domestic challenges that affect our ability to export,” he added.
