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BP SURVEY
Accountants
‘We have seen no material improvement in the
availability of credit to the SME sector’
Nobody knows better than accountants about how the economy is performing
and the issues facing large and small businesses. NICK MULCAHY canvassed
managing partners for their insight into liquidity, credit conditions
and prospects for the economy in 2012
Mike McKerr
Ernst & Young
Our forecasts
show
economic
growth
struggling at
just 0.5% in
2012, largely
as a result of
weak domestic
conditions and
falling
demand for
exports.
However, our
forecasts
indicate
Mike McKerr,
Ernst & Young
Ireland will perform strongly in 2013,
with GDP growth picking up to an
average of 4.1% per annum over the
period to 2020, as the economy’s core
strengths come to the fore once more.
Our exports remain remarkably resilient
and have grown at a time when countries
including France and Germany saw their
exports decline.
Liquidity and credit conditions for
SMEs have changed very little over the
past 12 months. Businesses that
performed well last year, and continue to
perform well this year, are still accessing
credit to some extent, particularly from
foreign banks. Businesses that are still
seen as ‘unbankable’ 12 months on
continue to struggle to access credit.
Liquidity for SMEs is generally far
worse than for multinationals, not just in
terms of access to growth capital but also
in terms of accessing working capital,
which is the lifeblood for any successful
business.
There has been a real and rapid
improvement in the cost competitiveness
of Irish businesses, reversing the trend
observed in the years since adopting the
euro. Many Irish businesses are
expanding their horizons by breaking
into new markets. We are seeing
successful entrepreneurs taking existing
generations of products and applying
them to emerging markets, while
continuing to innovate with nextgenerations
in markets closer to home.
Last December, Ernst & Young
presented its findings to the G20 on the
best approach for governments to create
an entrepreneurial culture. The five key
steps include linking entrepreneurship
strategy to job creation, creating policy
that helps funding access, establishing
pro-entrepreneurial tax policy and
creating better links between state
agencies to help support entrepreneurs.
Paul McCann
Grant Thornton
I think that the
Irish economy
is nearing the
bottom, but the
environment
still remains
difficult. Only
the fittest
companies
can survive.
Liquidity and
credit
conditions for
SMEs have
remained in a
difficult
position over
Paul McCann,
Grant Thornton
the past year; in other words, they are no
better or worse off than the previous
year. Trading in 2011 was mixed for
Grant Thornton, according to different
service lines, but we are optimistic going
into 2012. Our risk area has increased,
particularly in financial services, and
regulatory compliance has become
increasingly more important to firms in
these difficult times. Our recovery and
forensic practices are busy, and we are
actively moving towards helping
businesses get ready for the future.
We hope to hire approximately 30
graduates this year, along with a further
20 people in certain niche areas.
Jim Mulqueen
RSM Farrell Grant Sparks
I don’t believe
we have
necessarily hit
the bottom yet.
Certainly the
property market
would appear
to have another
10-20% to go
this year, based
on recent
commentary.
While some of
the banks have
been recapitalised
Jim Mulqueen, RSM
and are looking
Farrell Grant Sparks
to lend again, there is a very large
proportion of companies who simply do
not, and probably never will in the short
term, fit the profile for refinancing or
extension of banking facilities.
Despite the government’s efforts, very
few SMEs have managed to increase
58 Business Plus March 2012