43% of Northern Ireland businesses report growth in the past 12 months, with 61% forecasting growth in the 12 months ahead, the results of the NI Enterprise Barometer 2024 have revealed today. However, optimism around turnover is overshadowed by increasing pressures on profitability, as one-in-ten businesses stated that they are in difficulty and/or at risk of closure amidst rising costs, skills shortages, and operational challenges.
The NI Enterprise Barometer, the annual survey of the region’s small, micro, and self-employed businesses commissioned by Enterprise Northern Ireland now in its sixth year, found that 43% of NI businesses report growth over the last 12 months, with 35% reporting stable conditions, 12% reporting contracting performance, and 10% stating that they are in difficulty/at risk of closure. While the 43% of businesses experiencing growth marks a 1% decrease from 2023, expectations for the next 12 months are markedly more optimistic, with 61% of businesses expecting growth, 27% expecting to remain stable, and just 7% and 5% expecting to contract or be in difficulty/at risk of closure respectively.
80% of 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. 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%.
32% of businesses report vacancies, an increase on the 27% of 2023. 55% of businesses state that the appropriate skills for their business have been difficult to find, with one in five finding it very difficult. 47% say that they do not know where to access skills support, a decrease from 53% in 2023. The highest skills development gaps were found to be: marketing and communications (54%); sales, exporting and business development (43%); market/customer research (31%); managing finances (28%); and understanding and embracing artificial intelligence (27%).
While 30% of businesses rate their productivity as very good or excellent, businesses do report concerns, with 40% calling their operating efficiency satisfactory/poor and 30% rating their technological adoption as satisfactory/poor.
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 £12m 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.”