• Slight positive change in ratings, however vast improvement needed.
• Business costs, jobs and banking issues still evoke greatest negative sentiment.
• Government’s dealing with Troika shows highest satisfaction rating.
ISME, 10th July 2012.
ISME, the Irish Small & Medium Enterprises Association, has released today (10th July 2012) its Government Satisfaction ratings from its survey of over 700 SMEs. The survey aptly shows the dissatisfaction with the government’s performance in the areas of jobs, banking, costs and dealing with the Troika and the overall dissatisfaction rating of -55.
Commenting on today’s survey, ISME CEO, Mark Fielding stated that “while the electorate was willing to allow the government some time to come to grips with the economic situation, after sixteen months more was expected. The time of promises and announcements about announcements without any concrete action was long gone. The disappointing satisfaction ratings from SME business people was a clear reflection of the mood of the sector and a warning to government that much more needs to be done in the struggle to come out of the crisis. The difficult decisions necessary to restore our competitiveness and recovery must be taken. A start would be a demonstration of resolve by instructing the banks to pass on the interest rate reduction, immediately”.
OVERALL RATING -55
While overall the satisfaction rating is negative, there is a slight improvement from the spring figures from -56 to -55. Medium sized businesses are the least negative at -41, while small business, at -58, is the most negative. As would be expected the sector most dissatisfied with Government performance is the Retail sector at -65, while Manufacturing is least negative at -42.
JOBS RATING -60
On the Jobs issue, the general satisfaction rating has decreased from -54 to -60. This is despite the much heralded Jobs Plan launched in the first quarter. The withdrawal of the redundancy rebate and the threats of mandatory sick pay and increases in PRSI are having a negative effect on sentiment. The continued delays in any reform of the social welfare system add to the dissatisfaction with government.
The satisfaction rating on how the government is handling the ongoing banking crisis continues to be most negative, although a slight improvement is recorded, from -74 in spring to -71 in this survey. The highest negative score of ‘Very Dissatisfied’ was scored in this category at -49.
On the question of SME lending, the question was asked, ‘in your opinion is the government making a difference to SME lending?’ – the negative response is overwhelming, with a deterioration from -92 in spring to a -95 in the summer survey. Micro and small businesses score the government consistently worse (-97) than the medium enterprises (-87). Construction, distribution and retail firms score the most negative here at -100, -98 and -97 respectively. This is reflected in other ISME surveys where the larger the business, the easier to get bank funding and the sectors mentioned are ‘personae non grata’ to the banks.
The most positive response from owner managers was on the question of the government’s dealing with the Troika, with an improvement noted from -21 to -19. Any positive movement in the national debt situation will improve this sentiment over the coming months.
BUSINESS COSTS -70
The government’s dealing with business costs was the most negative response in the spring survey at
(-76) and, while improved remains at a -70. On this issue the medium businesses were most disappointed (-75), while micro enterprises scored a -64. The creep of government influenced costs continues to negatively affect business performance, profitability and sentiment. While businesses have reduced their cost base in line with the reduction in consumer demand, the message has not got to the administration, which continues to allow energy, transport and a raft of local charges to increase. In addition, a range of domestic services, such as financial and legal costs are among the highest in comparator group and must be reduced, despite opposition from vested interests in the banking, accountancy and legal sectors.
The Association demands that the government address the key issues of costs, jobs and access to finance and prioritise the restoration of our competitiveness by addressing public sector costs, exposing sheltered sectors to greater competition and achieving a greater access to bank credit for SME business. How the government addresses these issues will determine their satisfaction rating, but more importantly will support and maintain our long term competitiveness and provide a foundation for sustainable economic growth.
To download the full press release including graphical analysis please go to the Media Section.
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