M2221 Q3 Oct Dec08

InterTradeIreland – Quarterly Business Monitor44102221

2

• Background And Methodology 3

• All Island Business Confidence 4

• Economic Conditions 26

• Cross Border Trade 40

• Migrant Workers 61

• Northern Ireland Specific Business Confidence And Economic Trends 67

• Republic Of Ireland Specific Business Confidence AndEconomic Trends 85

Table Of Contents

3

• InterTradeIreland Quarterly Business Monitor – Quarter 3 (covering the October to December 2008 period), was conducted between 12th – 23rd January 2009

• All interviews conducted via telephone, from the Millward Brown Ulster Telephone Centre in Belfast

• Total sample size : 1000 businesses per quarter• 500 Northern Ireland• 500 Republic of Ireland

> Note: This report does not contain Q2 (2008 / 2009) tracking data

• Sample comprises private sector organizations across the All Island Business marketplace

• Sample controlled by company size (number of employees) and industry sector

• All respondents at most senior level in organization• CEO / MD / proprietor

• All research was conducted in accordance with the Market Research Society ethical Code of Conduct

• (This report cannot be reproduced in whole or in part without permission from the authors)

Background And Methodology

4

5

• During the third quarter of the 2008 / 2009 tracking (October - December ‘08), excluding seasonal variations, just over 1 in 10 (13%) businesses throughout the island had experienced an increase in turnover. This however, represented a significant decline in trends over the past year. (Quarter 3 2007 / 2008 = 34% - Quarter 3 2008 / 2009 = 13%). The proportion of businesses that experienced a decrease in turnover was higher in the Republic of Ireland (ROI = 61% / NI = 44%), and within the construction (64%) and retail / distribution (58%) sectors. Optimism amongst Irish businesses has also continued to decline, with only 18% anticipating and increase in turnover during the next quarter (January – March ’09), compared to 41% of businesses at the same point last year - 36% were expecting turnover to remain the same, and 39% predicting a decline. Optimism for the incoming quarter was highest amongst those within the professional services and leisure sectors, and lowest within construction, manufacturing and retail / distribution.

• Just over 1 in 10 (11%) Irish businesses recorded an increase in profitability over the past quarter, again revealing significant declines over the year (Quarter 3 2007 / 2008 = 30% - Quarter 3 2008 / 2009 = 11%). Indeed, almost half of businesses (48%) actually recorded a reduction in their profit levels, a trend which was more prevalent amongst ROI businesses (53%) compared to NI (43%). Optimism on profitability for the next quarter also dropped, with under 1 in 5 (17%) businesses throughout Ireland expecting an increase. This projected uplift in profitability has also fallen back continuously since January 2008, when over twice as many companies (36%) envisaged improved profits. Companies within the various service sectors continued to portray a more upbeat prediction for the incoming quarter, relative to the manufacturing, construction and agriculture industry sectors.

Executive Summary

6

• Only 6% of businesses increased employee levels over the past quarter, a trend which also has experienced gradual decline (January ‘08 = 15%) – in contrast, a quarter (25%) of businesses had lowered their staffing numbers over the period, a trend which was again more significant in ROI (30%) relative to NI (19%). Expectations of increased staffing levels over the next quarter stood at 5%, with 14% overall anticipating a decrease. Pessimism was noticeably higher amongst those within the construction (23%) and manufacturing sectors (27%).

• Encouragingly, three quarters (75%) of businesses on the ‘Island’, were optimistic about their company performance over the course of the next three years, with almost 1 in 5 (15%) being ‘very optimistic’, and 3 in 5 (60%) ‘fairly optimistic’. Although optimism has fallen from 84% to 75% over the past year, trends have managed to remain relatively consistent during the last 6 month period. These levels of optimism were consistent across both NI and ROI businesses, although slightly lower in the construction (61%), manufacturing (69%) and agriculture (69%) sectors.

• During Quarter 3, over a third (36%) of businesses throughout Ireland were optimistic that their respective Governments would improve business conditions over the course of the next 3 years, revealing an improvement over the past 6 months (June ’08 = 30%), and indeed matching trends recorded at the same point last year. NI businesses (40%) were noticeably more optimistic about their Government’s intentions compared to their ROI counterparts (31%).

Executive Summary

7

• The most frequently cited spontaneous barriers to company growth over the next twelve months revolved around the economy and market trends (32%), as well as a perceived lack of disposable income (16%). There was a plethora of other barriers mentioned such as reduced consumer spending (9%), a lack of credit and lending (8%), reduced investment (8%), fewer contracts and work opportunities (5%), as well as a decline in consumer confidence (4%).

• When asked what factors would help company performance over the next 12 months, almost 1 in 5 (16%) businesses spontaneously made reference to stability in the banking sector, and hence availability of credit. Other, less frequently cited factors included increased confidence in the economy (7%), higher employment (6%), a reduction in interest rates (6%), more funding and investment (5%), increased government assistance (4%), and a stabilisation of € / £ exchange rate.

Executive Summary

8

‘All Island’ – Business Turnover Over The Past Quarter[ Base: All IoI Respondents – n=1000 per quarter ]

19

3

38

40

21

4

39

36

23

6

37

34

34

5

36

26

43

3

35

20

53

2

32

13

44

2

36

18

61

3

28

8

Increased

Remained the same

Decreased

Don’t know / NA

Quarter 1Apr-Jun’07

n=1000%

Quarter 24Jul-Sep’07

n=1000%

Quarter 3Oct-Dec’07

n=1000%

Quarter 4Jan-Mar’08

n=1000%


n=1000%


n=1000%

NorthernIrelandn=500

%

RepublicOf Ireland

n=500%

‘ALL ISLAND’ QUARTER 3

Period Covering

2007 / 2008 2008 / 2009

9

53

2

32

13

‘All Island’ – Business Turnover Over The Past Quarter Quarter 3 Trends By Industry Sector

[ Base: All IoI Respondents – n=1000 per quarter ]

‘All Island’ Sector Analysis

Agriculture,

forestry and

fishing

Manufacturing of food,

drinks, textiles,

clothing and electronics

Construction

and trades

men

Service –

professional

Service – leisure, hotels,

and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

9

48

43

0

19

30

50

1

5

28

64

3

15

35

47

3

12

36

50

2

14

25

58

2

12

34

53

2

Increased

Remained the same

Decreased

Don’t know / NA

‘All Island’Quarter 3Oct-Dec’08

n=1000% n =

10

‘All Island’ – Expectations For Business Turnover Over The Next Quarter


12

4

41

44

15

4

38

43

15

7

37

41

18

6

40

36

33

6

40

21

39

7

36

18

31

8

39

22

47

6

33

14


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

To increase

To remain the same

To decreaseDon’t know /

NA


2007 / 2008 2008 / 2009

11

39

7

36

18

‘All Island’ – Expectations For Business Turnover Over The Next QuarterQuarter 3 Trends By Industry Sector



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

6

45

38

11

18

32

42

7

8

31

55

6

20

40

33

7

20

40

35

4

17

35

41

7

25

32

34

9

To increase

To remain the same

To decrease

Don’t know / NA


n=1000%

n =

12

‘All Island’ – Business Profitability Over The Past Quarter[ Base: All IoI Respondents – n=1000 per quarter ]

20

8

41

33

20

8

44

28

20

9

41

30

33

8

38

21

42

4

39

15

48

4

37

11

43

6

36

15

53

3

37

7

Increased

Remained the same

Decreased

Don’t know / NA


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering


2007 / 2008 2008 / 2009

13

48

4

37

11

‘All Island’ – Business Profitability Over The Past QuarterQuarter 3 Trends By Industry Sector



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

3

48

48

0

11

26

57

6

6

33

59

1

11

44

41

4

13

38

43

5

11

35

48

6

13

35

50

2

Increased

Remained the same

Decreased

Don’t know / NA


n=1000%

n =

14

‘All Island’ – Expectations For Business Profitability Over The Next Quarter


12

6

41

41

15

7

39

40

13

9

41

36

20

8

41

31

35

8

38

20

37

5

41

17

30

7

43

20

42

4

40

14


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

To increase

To remain the same


NA


2007 / 2008 2008 / 2009

15

37

5

41

17

‘All Island’ – Expectations For Business Profitability OverThe Next Quarter - Quarter 3 Trends By Industry Sector



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

6

48

43

3

10

39

43

7

11

34

50

5

21

42

32

5

22

45

31

2

14

43

37

6

26

35

32

7

To increase

To remain the same

To decrease

Don’t know / NA


n=1000%

n =

16

‘All Island’ – Number Of Employees Over The Past Quarter[ Base: All IoI Respondents – n=1000 per quarter ]

101

66

22

112

69

17

12

3

70

15

14

2

74

11

25

1

72

9

25

1

68

6

19

1

72

8

30

2

64

7Increased

Remained the same

Decreased

Don’t know / NA


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering


2007 / 2008 2008 / 2009

17

25

1

68

6

‘All Island’ – Number Of Employees Over The Past QuarterQuarter 3 Trends By Industry Sector



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

5

83

11

0

11

59

28

1

3

53

43

1

6

70

22

2

5

63

29

2

5

72

22

2

9

73

18

0

Increased

Remained the same

Decreased

Don’t know / NA


n=1000%

n =

18

‘All Island’ – Expectations For Number Of Employees Over The Next Quarter


61

78

15

43

77

16

63

76

16

62

80

13

12

3

77

8

14

4

77

5

103

80

8

18

4

75

3


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

To increase

To remain the same


NA


2007 / 2008 2008 / 2009

19

14

4

77

5

‘All Island’ – Expectations For Number Of Employees Over The Next Quarter – Quarter 3 Trends By Industry Sector



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

5

89

6

0

11

57

27

5

1

71

23

5

5

77

12

6

6

78

12

4

4

82

12

2

6

81

11

2

To increase

To remain the same

To decrease

Don’t know / NA


n=1000%

n =

20

‘All Island’ – Optimism Regarding Business Performance Over The Next 3 Years


9

3

51

34

104

55

27

10

3

56

28

13

4

61

19

17

4

55

19

15

4

60

15

13

5

59

17

17

4

62

13Very optimistic

Fairly optimistic

Fairly pessimisticVery pessimistic

(Don’t Know)


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(3) (3) (3) (4) (5) (5) (7) (4)


2007 / 2008 2008 / 2009

21

15

4

60

15

‘All Island’ – Optimism Regarding Business Performance Over The Next 3 Years – Quarter 3 Trends By Industry Sector



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

9

60

20

9

11

58

16

7

6

55

23

8

18

60

15

4

19

64

11

2

15

62

15

2

21

58

11

5


n=1000%

Very optimistic

Fairly optimistic

Fairly pessimisticVery pessimistic

(Don’t Know) (5) (3) (7) (8) (4) (4) (6) (6)

n =

22

‘All Island’ – Optimism That Government Will Improve Business Conditions Over The Next 3 Years


28

17

38

9

33

26

33

5

34

24

32

5

34

26

31

4

33

31

26

4

35

23

32

4

33

20

36

4

35

28

29

4

Very optimistic

Fairly optimistic

Fairly pessimistic

Very pessimistic

(Don’t Know)


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(7) (7) (5) (6) (6) (5) (6) (4)


2007 / 2008 2008 / 2009

23

35

23

32

4

‘All Island’ – Optimism That Government Will Improve Business Conditions Over The Next 3 Years – Quarter 3 Trends By Industry Sector



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

50%

90%

100%

210%

160%

270%

120%

0

43

28

28

6

29

37

23

6

37

30

24

7

29

37

20

6

36

34

16

3

29

39

25

2

36

28

29


n=1000%

Very optimistic

Fairly optimistic

Fairly pessimistic

Very pessimistic

(Don’t Know) (5) (0) (4) (3) (7) (8) (4) (6)

n =

24

‘All Island’ – Main Barriers To Company Growth Over Next 12 Months (Spontaneous)

[ Base: All Respondents – n=1000 ]

32%

16%

9%

8%

8%

5%

4%

4%

3%

3%

3%

3%

3%

2%

2%

28%

12%

The economy / market trends

Lack of disposable income

Reduced consumer spending

Lack of credit / lending

Lack of investment / funding

Lack of work / contracts

Decline in consumer confidence

Unemployment / lack of jobs

Slow down in the construction industry

Currency / exchange rates

Being a specialist / luxury goods

Cost of resources / overheads

The housing market / property prices

Cash flow

Reduced demand

Others

None / don't know


%

RepublicOf Ireland

n=500%

33

16

9

10

8

4

3

3

3

2

3

4

3

2

2

26

12

30

15

10

6

8

6

6

4

4

4

3

2

3

3

2

29

13

Period Covering


n=1000%

25

‘All Island’ – Factors That Would Help Company PerformanceOver Next 12 Months (Spontaneous)


16%

7%

6%

6%

5%

4%

4%

3%

3%

2%

2%

2%

2%

1%

14%

25%

Stability in banking sector / availability of credit

Increased confidence in the economy

More employed

Reduced interest rates

Funding / investment

Increased government assistance

Stable exchange rates

Reduced VAT

Increased consumer spending

Lower fuel prices

Growth in construction industry

Consumers to buy / sell property

Reduced living costs

Reduced business costs

Others

None / Don't know


%

RepublicOf Ireland

n=500%

15

6

7

6

6

3

7

3

3

2

3

3

1

1

15

27

17

9

5

5

5

5

3

4

2

3

2

1

1

1

13

24

Period Covering


n=1000%

26

27

• As a result of recent global economic conditions and predictions, almost half (46%)

of businesses stated they had revised their targets downwards, a trend which has grown noticeably since April 2008 (31%). Interestingly, these revisions of targets were significantly more prevalent amongst ROI businesses (56%), compared to those in NI (37%).

• Almost 9 in 10 (87%) businesses had noticed a tightening of expenditure by their customers or business counterparts over recent months. Indeed, almost 4 in 5 (78%) businesses stated they had actually revised their own expenditure priorities as a result of the current economic conditions. The proportion of businesses experiencing these actions had again risen noticeably since April 2008, and were more likely to have been implemented by ROI companies.

• Just under 4 in 5 (79%) stated the economic downturn has had an adverse impact on their business (April ’08 = 62%), with 20% experiencing a severe adverse impact, and 59% a moderate adverse impact. The severity of the impact of the downturn was higher amongst small and medium sized enterprises, as well as those businesses located in ROI.

Executive Summary

28

• In terms of potential impact over the next 12 months, over 4 in 5 (81%) believed the economic downturn would have an adverse impact on their business, with some 18% anticipating a severe adverse impact, and 63% a moderate adverse impact. These perceptions were again more prevalent amongst ROI businesses.

• For over 2 in 5 (42%) companies, access to credit such as small business loans and overdrafts during the economic downturn was having an adverse impact on their business. Similarly, over a third (36%) claimed their ability to change existing overdraft or loan conditions was also having a detrimental effect.

• Respondents also stated the economic downturn was having a significant adverse impact on a variety other elements of their business, in particular, their cash flow (68%), followed by the demand for their goods and services (66%), business growth (62%), the cost of doing business (63%), capital spending plans (56%), payment of goods and services delivered (55%), and indeed future employment intentions (46%).

• When asked to specify the single most important issue facing their business through 2009, over a third (34%) cited cash flow, followed closely by the demand for their goods and services (33%). Smaller proportions referred to business and consumer confidence (14%), rising energy costs (8%), and exchange rates (6%).

Executive Summary

29

• At this juncture, businesses were asked to specify what assistance would be of help during the economic downturn. Over a quarter (28%) suggested they required information on how to access finance, with slightly smaller proportions desiring information on cash management (25%), assistance with cost control such as energy, waste, transport etc., (25%), advice on how to speed up payments (20%), and information on new potential cross-border markets (17%).

• In terms of things Government could do to help business during the downturn, over a quarter spontaneously cited the need for borrowing to be made easier (27%), reduced levels of VAT (9%), reduced taxation or tax concessions (7%), help to increase consumer confidence (7%), assistance for small business and SME’s (7%), as well as financial assistance for struggling businesses (6%).

Executive Summary

30

‘All Island’ - Actions Taken in Light Of Recent Global Economic Conditions And Predictions …


62

31

51

44

48

46

56

37

40

56

Yes

No

(Don’t Know)


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(7) (5) (5) (6) (4)

Does your business intend to revise its targets downwards?‘All Island’

2007/2008 2008/2009

31



22

77

14

86

12

87

16

84

9

91

Yes

No

(Don’t Know)


%

RepublicOf Ireland

n=500%

Period Covering

(1) (1) (1) (0) (1)

Have you noticed a tightening of expenditure by your customers or business counterparts?


n=1000%


n=1000%


n=1000%

‘All Island’2007/2008 2008/2009

32



36

61

28

70

21

78

26

73

16

83

Yes

No

(Don’t Know)


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(3) (3) (2) (1) (2)

Has your business revised its expenditure priorities?

‘All Island’2007/2008 2008/2009

33

‘All Island’ - Impact Of Economic Downturn On Business To Date[ Base: All Respondents – n=1000 ]

35

51

11

24

55

18

20

59

20

25

58

15

15

60

24

20

60

19

18

58

24

28

53

18Severe

adverse impact

Moderate adverse

Impact

No impact at all

(Don’t know)


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(3) (3) (1) (1) (1) (1) (0) (1)

'All Island' Quarter 3 Size Of Company

Smalln=810

%

Mediumn=135

%

Largen=55

%

2007/2008 2008/2009

34

‘All Island’ - Potential Impact Economic Downturn On BusinessOver Next 12 Months


18

61

13

10

57

27

15

63

18

18

63

13

12

62

23

15

63

18

12

65

20

20

60

19Severe

adverse impact

Moderate adverse

Impact

No impact at all

(Don’t know)


n=1000%


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(8) (6) (4) (6) (2) (4) (3) (1)

Smalln=810

%

Mediumn=135

%

Largen=55

%

'All Island' Quarter 3 Size Of Company2007/2008 2008/2009

35

'All Island' - Impact Of Economic Downturn On Financial Aspects Of Business …


47

23

19

49

21

17

45

24

21

51

20

16

52

17

15

50

23

16

Severe adverse

impact

Moderate adverse

Impact

No impact at all

(Don’t know)


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(12) (13) (10) (14) (16) (12)

'All Island'

Access to credit such as small business loans and overdrafts


n=1000%


%

RepublicOf Ireland

n=500%

'All Island'

Changing overdraft or loan arrangement conditions

36

‘All Island’ - Impact Of Economic Downturn On Certain Aspects Of Business …


28

42

26

30

45

21

32

43

19

30

46

17

32

34

22

38

38

17

45

29

17

37

19

11

38

16

6

34

93

Severe adverse

impact

Moderate adverse

Impact

No impact at all

(Don’t know)

Cash flow%

(4) (3) (6) (7) (12) (7) (9) (33) (39) (55)

Demand for goods and services

%

Capital spending

plans%

Business growth

%

Cost of doing business

%

Payments for the goods

and services you deliver

%

Future employment

intentions%

Research, development

and innovation budgets

%

Intentions to engage in

cross-border trade

% Intentions to export outside Ireland

%

37

34%

33%

14%

8%

6%

1%

2%

2%

Cash flow

Demand for goodsand services

Business andconsumer confidence

Rising energy costs

Exchange ratesbetween € and £

Available skills base

R&D and innovation

Don't know

‘All Island’ - Single Most Important Issue Facing Business During 2009[ Base: All Respondents – n=1000 ]


n=1000%

'All Island'NorthernIrelandn=500

%

RepublicOf Ireland

n=500%

32

29

14

9

9

2

1

3

35

38

14

6

4

0

1

1

Period Covering

38

28%

25%

25%

20%

17%

16%

16%

14%

12%

9%

7%

6%

1%

Information on access to finance

Information on cash management

Assistance with cost control, such as energy,waste, transport etc.

Information on speeding up payments

Information on new cross-border markets

Assistance with the development of new productsand services

Financial assistance towards cross-border trade

Information on public procurement markets

Information on debt or solvency issues

Reduction in grant contribution ratios forcompanies

Assistance in finding partners for R&D and training

Deferral of matched grant contributions bycompanies particpating in govt programmes

Other

‘All Island’ – Assistance Required To Help Business[ Base: All Respondents – n=1000 ]


n=1000%

'All Island'

Period Covering

39

‘All Island’ – Things Government Could Do To Help Business During Economic Downturn


27%

9%

7%

7%

7%

6%

5%

4%

4%

4%

3%

3%

3%

3%

34%

19%

Make borrowing easier / recapitalise banks

Cut VAT

Reduce tax / tax concessions

Help increase consumer confidence

Help small business / SME's

Financial assistance to strugging businesses

Get people back to work

Lower interest rates

Cash injection into the economy

Reduce rates on property

Increase cash flow

Reduce hype / reassure consumers

Maintain grant aid

Show leadership / honesty

Others

Don't know

'All Island' NorthernIrelandn=500

%

RepublicOf Ireland

n=500%

27

5

8

5

7

6

4

5

5

5

3

3

3

3

34

20

27

12

6

9

6

5

6

3

3

2

3

3

3

3

35

18

Period Covering


n=1000%

40

41

• Over a third (35%) of businesses throughout Ireland currently take part in cross-border trade, a trend which was more prevalent amongst Northern Ireland companies (NI = 44% / ROI 26%). These organisations were more likely to be operating within the manufacturing (55%), and agriculture (43%) industry sectors.

• Amongst those who did not take part in cross-border trade, 23% cited they were a local business with a local customer base, with a further 17% stating their business was located too far from the border. Others commented that their company was too small to consider cross-border trade (15%), or that they already had enough work without pursuing new markets (14%). Issues regarding exchange rates (3%), financial concerns (3%), and different legal regulations (3%) were also a consideration for some.

• Amongst NI businesses that traded throughout Ireland, cross-border trading accounted for 21.79% of their turnover (July’07 = 18.7%), compared to 14.19% amongst businesses located in ROI (July’07 = 14.6%).

Executive Summary

42

• Over a third (35%) of those businesses currently trading cross-border, expected their ‘all island’ trading to increase over the course of the next year, revealing an increase in expectations over the past 6 month period (July ’08 = 29%) - almost half (46%) anticipated their cross border trading to remain at similar levels. Expectations of an increase were significantly higher amongst NI businesses (NI = 42% / ROI = 25%), and those within the manufacturing (44%) sector. Those businesses most likely to expect a decrease in their cross-border trade over the next 12 months could be found in the construction (29%) and retail / distribution sectors (25%).

• Over 2 in 5 (42%) businesses throughout Ireland expected cross-border co-operation to grow over the course of the next 3 years, a perception which was especially prevalent within the service sectors. Just over 1 in 10 (12%) anticipated a decline.

• Over a third (35%) had some kind of formal or informal cross border links, a trend which was relatively consistent for both NI and ROI companies. The most frequently cited links included the purchase of raw materials, services or equipment as part of a larger group (20%); general business meetings (10%), and visits to other company production facilities or offices (8%).

• Encouragingly, almost three quarters (73%) of companies had benefited from these formal and informal cross border links, a perception which was consistent amongst companies North and South, and especially strong amongst those within the manufacturing and professional services sectors.

Executive Summary

43

• Amongst those businesses that currently have cross border links, half (50%) plan to develop these links over the next 12 months. Amongst those that have no links, 15% stated that they were planning to create some over the same period. In effect, over a quarter (27%) of all businesses throughout Ireland, regardless of their current trading relationships, plan to develop their cross boarder linkages over the course of the next 12 months.

• The main motivation for cross border cooperation was to access new and larger markets (63%), a response which was noticeably higher amongst NI businesses (70%), compared to their Southern counterparts (52%). Other motivations included cost reductions (24%), access to wider technologies (7%), access to a wider labour pool (6%) and risk reduction when entering new markets (6%).

• Barriers encountered when developing cross border trade included different exchange rates (33%), limited opportunities to meet potential new contacts (12%), poor infrastructure (6%), too many large contracts elsewhere (5%) and political instability (4%).

Executive Summary

44

• Some 15% of businesses stated that having two separate currencies had a positive impact on cross-border trade, a perception which was stronger amongst NI businesses (20%) compared to ROI (10%). Over a half (53%) claimed it made no difference, with almost a quarter (22%) believing it actually had a negative impact on cross-border trade. Similar trends were also recorded when businesses were asked to specify the impact on cross-border trade of recent exchange rate movements between sterling and the euro.

• The establishment of cross border networking opportunities (61%); sales and marketing (61%); sector specific market information (55%); and increased awareness of venture capital opportunities (49%) continued to be regarded as the most effective support techniques in helping business develop cross-border trade.

• Over two thirds (67%) of businesses ‘all island’ stated they would like to see more cross-border co-operation in the future, an opinion which was most noticeable in the manufacturing (75%) and other services (71%) sectors. Just over a quarter (28%) claimed they would like to see cross-border co-operation remain the same.

Executive Summary

45

62

40

65

35

56

44

74

26

Does Company Take Part In Cross-Border Trade[ Base: All IoI Respondents – n=1000 per quarter ]

‘All Island’ Sector Analysis – Quarter 3

Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics

Construction and tradesmen

Service –

profession

al

Service – leisure,

hotels, and

catering

Service –

retail / distribution

Other

services

50%

90%

100%

210%

160%

270%

120%

43

57

55

45

30

70

32

68

29

71

36

64

33

67

Yes

No


n=1000%


%

RepublicOf Ireland

n=500%

n =

Period Covering


n=1000%

‘All Island’

46

34%

23%

17%

15%

14%

4%

4%

3%

3%

3%

3%

23%

Not viable for business

Local business / local customers

Foo far away from border / geographicalreasons

Company is too small / family run

Enough work already / no need to look cross-border

Feel more comfortable working locally

No opportunities / demand

For financial reasons

Have sister / parent companies cross-border

Different legal regulations

Due to exchange rates

Others

Reasons For Not Taking Part In Cross-Border Trade[ Base: All IoI Respondents Who Do Not Trade Cross-Border – n=648 ]


n=1000%


%

RepublicOf Ireland

n=500%

34

25

10

16

15

5

3

3

2

3

3

22

34

21

21

15

14

4

4

3

3

3

2

24

Period Covering

47

34%

16%

16%

17%

7%

10%

19%

1 - 5%

6 - 10%

11 - 20%

21 - 50%

50+%

Don't know / refused

Average:

Percentage Of Business Turnover Which Comes From Cross-Border Trade

[ Base: All IoI Businesses That Take Part In Cross-Border Trade – n=352 ]


n=352%


%

RepublicOf Ireland

n=131%

31%

15%

16%

20%

12%

10%

21.79%

1 - 5%

6 - 10%

11 - 20%

21 - 50%

50+%


38%

19%

16%

15%

3%

12%

14.19%

1 - 5%

6 - 10%

11 - 20%

21 - 50%

50+%


Period Covering

(Excluding ‘don’t knows’)

48

57

14

29

46

19

35

38

20

42

59

16

25

Expect % Of Cross-Border Trade To Increase / Decrease Over The Next 12 Months

[ Base: All IoI Businesses That Take Part In Cross-Border Trade – n=352 ]


Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics


Service –

profession

al


hotels, and

catering

Service –


Other

services

21*%

50%

30*%

68%

46*%

97%

40*%

33

59

8

44

38

19

27

43

29

37

47

16

37

54

8

32

43

25

33

50

17

Increase

Remain the same

Decrease

n =

*Small Bases


n=395%


%

RepublicOf Ireland

n=131%

Period Covering


n=352%

‘All Island’

49

53

7

40

46

12

42

48

11

40

45

13

44

Expect Cross-Border Co-Operation To experience Growth / Decline Over The Next 3 years

[ Base: All IoI Respondents – n=1000 ]


Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics


Service –

profession

al


hotels, and

catering

Service –


Other

services

50%

90%

100%

210%

160%

270%

120%

40

54

6

39

48

13

37

47

16

44

46

10

42

47

12

42

44

13

45

45

10

Increase

Remain the same

Decrease

n =


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering


n=1000%

‘All Island’

50

20%

10%

8%

7%

6%

6%

Purchase of raw materials, services orequipment as part of a larger group

General business meetings

Visits to other companies' production facilitiesor offices

Dinner or lunch with senior executives todiscuss business

Co-operate with other companies in meetingand design or quality requirements of

customers

Co-operate with other companies in theproduction of your goods or services

Does Business Have Any Of The Following Cross-Border Links [ Base: All Respondents – n=1000 ]


n=1000%


%

RepublicOf Ireland

n=500%

19

11

9

9

8

8

21

9

6

5

4

5

Period Covering

51

5%

5%

4%

4%

4%

65%

Share any technical capabilities with othercompanies

Bid on contracts or prepare joint tenders withother companies

Participate in any joint marketing effort or sharethe cost of trade shows with other companies

Co-operate with other companies in stafftraining programmes

Participate in joint distribution network withother companies

None of these

Does Business Have Any Of The Following Cross-Border Links (Continued)



n=1000%


%

RepublicOf Ireland

n=500%

6

6

5

5

4

63

4

4

4

4

4

67

Period Covering

52

25

39

32

24

42

31

27

40

30

22

43

31

(1) (4) (3) (4) (0) (6) (0) (2) (12) (3) (0)

Benefit Of Cross- Border Linkages In Helping Business Turnover[ Base: All IoI Respondents With Cross-Border Linkages – n=348 ]


Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics


Service –

profession

al


hotels, and

catering

Service –


Other

services

21*%

44 *%

34*%

69%

52%

90%

36*%

34

52

13

43

33

18

29

47

25

37

40

20

26

28

34

22

46

29

31

51

18

Very beneficial

Fairly beneficial

Made no difference

(Don’t know)

n =

*Small Bases


n=341%


%

RepublicOf Ireland

n=163%

Period Covering


n=348%

‘All Island’

53

39

7

54

42

8

50

40

9

51

43

8

48

Plans To Develop Cross-Border Activity Or Links Over The Next 12 Months

[ Base: All IoI Respondents With Cross-Border Linkages – n=348 ]


Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics


Service –

profession

al


hotels, and

catering

Service –


Other

services

21*%

44 *%

34*%

69%

52%

90%

36*%

53

41

7

69

28

3

61

31

8

56

40

4

46

47

7

33

51

16

52

39

8

Yes

No

Don’t know


n=341%


%

RepublicOf Ireland

n=163%

n =

Period Covering


n=348%

‘All Island’

*Small Bases

54

69

19

11

73

11

15

68

11

21

78

12

10

Plans To Develop Cross-Border Activity Or Links Over The Next 12 Months

[ Base: All IoI Respondents Without Cross-Border Linkages – n=652 ]


Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics


Service –

profession

al


hotels, and

catering

Service –


Other

services

21*%

44 *%

34*%

69%

52%

90%

36*%

0

90

10

25

63

11

15

75

9

17

75

8

19

70

11

12

71

17

12

78

9

Yes

No

Don’t know


n=659%


%

RepublicOf Ireland

n=337%

n =

Period Covering


n=652%

‘All Island’

*Small Bases

55

63%

24%

7%

6%

6%

19%

Access to a bigger /new market

Cost reduction

Access to widertechnology

Risk reduction inentering markets

Access to wider labourpool

None of these

Motivations For Cross-Border Business Co-Operation[ Base: All IoI Respondents Who Trade, Have Links OR Plan To Develop

Links Cross-Border – n=514 ]


n=514%


%

RepublicOf Ireland

n=220%

70

17

5

6

6

18

52

34

11

7

6

20

Period Covering

56

33%

12%

5%

6%

3%

51%

Different exchangerates

Limited opportunitiesto meet potential

business contacts

Too many largecontracts elsewhere

Poor infrastructure

Political instability

None applicable / noneof these

Barriers Encountered When Developing Cross-Border Trade[ Base: All IoI Respondents Who Trade, Have Links Or Plan To Develop – n=514 ]


n=514%


%

RepublicOf Ireland

n=220%

32

12

4

6

4

50

34

13

7

5

3

51

Period Covering

57

Impact Of Having Two Separate Currencies On Cross-Border Trade[ Base: All Respondents – n=1000 ]

22

54

6

22

53

15

19

19

20

24

24

10

21

55

15

22

44

15

31

47

13Positive impact

Made no difference

Negative impact

(Don’t know)


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(19) (10) (9) (12) (9) (18) (10)

'All Island' Size Of Company

Smalln=810

%

Mediumn=135

%

Largen=55

%

58

Impact Of Recent Exchange Rate Movements Between The £ And € On Conducting Cross-Border Trade


22

48

12

24

48

19

24

47

23

25

49

16

23

49

20

28

48

14

33

30

24Positive

impact

Made no difference

Negative impact

(Don’t know)


n=1000%


n=1000%


%

RepublicOf Ireland

n=500%

Period Covering

(19) (9) (17) (20) (8) (10) (13)

'All Island' Size Of Company

Smalln=810

%

Mediumn=135

%

Largen=55

%

59

Effectiveness Of Support Techniques In Helping Business Develop Cross-Border Trade

[ Base: All IoI Respondents Who Trade, Have Links Or Plan To Develop Links Cross-Border – n=514 ]

18

21

40

21

17

21

41

20

19

25

38

17

22

29

36

13

25

35

30

11

25

35

28

12

Very effective

Fairly effective

Not very effective

Not at all effective

Establishment of Cross-Border networking

opportunities%

Sales and marketing support

%

Sector specific market

information%

Increase awareness of

venture capital opportunities

%

Innovation capability supports

%

Lobbying Governments

%

60

28

4

67

31

3

66

26

5

69

Business Perceptions On Levels Of Cross-Border Business Co-Operation In The Future



Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics


Service –

profession

al


hotels, and

catering

Service –


Other

services

50%

90%

100%

210%

160%

270%

120%

66

28

6

75

19

6

69

28

3

65

32

3

67

29

4

64

31

5

71

24

5

Like to see more co-operation

Co-operation to remain the same

Like to see less co-

operation


%

RepublicOf Ireland

n=500%

n =

Period Covering


n=1000%

‘All Island’

61

62

• Almost a quarter (23%) of businesses throughout Ireland employ migrant workers, a trend which emerged significantly higher in ROI (34%), compared to NI (13%). The sectors most likely to employ migrant workers were manufacturing (27%), and leisure, hotels and catering (38%).

• Amongst these organisations, on average, migrant workers comprised 23.97% of their workforce, a trend which was slightly higher amongst ROI companies (24.56%), compared to those in NI (22.41%).

• 10% of businesses had increased their proportion of migrant workers over the past 12 months – in sharp contrast however, 27% actually decreased their proportion of migrant workers, creating a net differential of -17%. In NI the net differential over the last year was -5%, compared to -20% in ROI.

• Migrant workers were largely employed within the unskilled manual (43%), skilled

manual (39%) and semi-skilled (28%) occupational groups, with significantly smaller proportions being employed in administrative (11%), professional (8%), managerial (7%) or associated professional (5%) roles.

Executive Summary

63

77

23

87

13

66

34

‘All Island’ Does Business Employ Migrant Workers[ Base: All IoI Respondents – n=1000 ]


Agriculture,

forestry and

fishing

Manufacturing of

food, drinks,

textiles, clothing

and electronics


Service –

profession

al


hotels, and

catering

Service –


Other

services

50%

90%

100%

210%

160%

270%

120%

17

83

27

73

17

83

17

83

38

62

21

79

22

78

Yes

No


%

RepublicOf Ireland

n=500%

n =

Period Covering


n=1000%

‘All Island’

64

24%

20%

25%

22%

10%

23.97%

1 - 5%

6 - 10%

11 - 25%

26 - 50%

50+%

Average score:

‘All Island’ Percentage Of Workforce That Are Migrant Workers[ Base: All Who Employ Migrant Workers – n=229 Excluding Don’t Know’s ]


n=229%


%

RepublicOf Ireland

n=167%

27%

19%

22%

22%

9%

22.41%

22%

20%

26%

22%

10%

24.56%

Period Covering

(Excluding Don’t know’s)

65

Has Proportion Of Migrant Workers Increased / Decreased Over Past 12 Months

[ Base: All Who Employ Migrant Workers – n=231 ]

27

63

10

19

67

13

29

62

9Increased

Remained the same

Decreased

NorthernIrelandn=62

%

RepublicOf Ireland

n=169%

Period Covering


n=231%

‘All Island’

66

43%

39%

28%

11%

8%

7%

5%

3%

Unskilled manual

Skilled manual

Semi-skilled

Administrative

Professional

Managers / seniorofficials

Associatedprofessionals

Others

40%

39%

26%

10%

8%

5%

3%

3%

51%

40%

33%

11%

8%

12%

10%

2%

Occupational Groups Within Which Migrant Workers Are Employed[ Base: All That Employ Migrant Workers – n=231 ]


n=231%


%

RepublicOf Ireland

n=169%

Period Covering

67

68

• During Quarter three of tracking (October - December ‘08), excluding seasonal variations, under 1 in 5 (18%) of NI businesses had increased their turnover, revealing a consistent downward trend over the course of the past year (Quarter 3 2007 / 2008 = 36%). Increases in turnover were more prevalent amongst those within the manufacturing sector (28%). Over a third (36%) stated their turnover had remained the same, leaving some 44% of businesses having experienced a decline in turnover during the last quarter. Optimism on turnover for the incoming three month period was also at a low level relative to the same point last year, (Quarter 3 2007 / 2008 = 44% - Quarter 3 2008 / 2009 = 22%), however it is worth noting trends have not declined over the last 6 months. Looking ahead over the next quarter, almost a third (31%) anticipate a decrease in turnover levels, a trend especially prevalent within the construction sector (41%).

• The proportion of NI businesses recording an increase in profitability has also fallen sharply over the past year (Quarter 3 2007 / 2008 = 31% - Quarter 3 2008 / 2009 = 15%). For over a third (36%) of businesses, profitability over the last quarter remained the same, with over 2 in 5 (43%) experiencing a decline . Optimism for the incoming three months has also recorded a gradual depression since last year (Quarter 3 2007 / 2008 = 38% - Quarter 3 2008 / 2009 = 20%). Again, it was the construction sector which was most pessimistic about profitability for the incoming period.

Executive Summary

69

• Businesses with increased employee levels also declined over the period (8%), revealing a noticeable downward trend since the same point last year (17%). Those NI businesses that had reduced their employee levels during Quarter 3 rose to 19%, with the vast majority (72%) remaining the same. Expectations of increased staffing levels over the next quarter also dropped back to 8%, with 10% actually anticipating a decline.

• 2 in 5 (40%) Northern Ireland businesses were optimistic that Government would improve business conditions over the next 3 years, however the majority (53%) remained pessimistic that the Government would achieve this. Optimism was highest amongst those in the manufacturing (47%), construction (52%), and leisure, hotels and catering (47%) industry sectors.

• On a more positive note, over three quarters (76%) of NI businesses were bullish and optimistic about their own business performance over the course of the next 3 years, a perception that was noticeably more prevalent within the service sectors.

• At the same point last year, 1 in 10 (10%) companies believed the Northern Ireland economy would experience strong recession over the course of the next 3 years. In January 2009, the proportion of NI businesses predicting this had risen significantly (38%). In contrast, 32% were anticipating moderate growth, and only 2% strong growth in the local economy.

Executive Summary

70

19

4

48

29

20

5

26

29

22

4

43

31

19

4

27

29

20

2

42

35

22

5

41

34

15

6

43

36

13

7

39

41

18

3

35

44

19

5

40

35

20

6

38

36

33

6

34

28

36

3

38

23

44

2

36

18

NI – Business Turnover Over Past Quarter Months[ Base: All NI Respondents – n=500 per quarter ]

Increased

Remained the same

Decreased

Don’t know / N/A

Period Covering







Quarter 2Jul-Sep‘05





Quarter 4Jan-Mar‘08

Quarter 1

Apr-Jun’08 Quarter 3

Oct-Dec’08

2005 / 2006 2006 / 2007 2007 / 2008 2008 / 2009

71

44

2

36

18

NI – Business Turnover Over Past Quarter By Sector[ Base: All NI Respondents – n=500 ]

Northern Ireland Sector Analysis

Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

5

59

36

0

28

34

35

3

9

35

54

3

19

33

44

3

14

36

50

0

23

31

43

3

14

35

48

3

Increased

Remained the same

Decreased

Don’t know / NA

Northern IrelandQuarter 3Oct-Dec’08

n=1000% n =

*Small Bases

Period Covering

72

12

4

43

40

12

5

42

41

10

5

44

42

9

3

33

55

10

3

40

48

13

3

38

46

8

5

35

52

9

7

36

49

10

6

40

45

14

7

37

43

14

8

34

44

16

7

41

37

31

7

38

23

31

8

39

22

NI – Expectations Of Business Turnover Over Next Quarter Months[ Base: All NI Respondents – n=500 per quarter ]

Increased

Remained the same

Decreased

Don’t know / N/A

Period Covering













Quarter 1


Oct-Dec’08

2005 / 2006 2006 / 2007 2007 / 2008 2008 / 2009

73

31

8

39

22

NI – Expectations Of Business Turnover The Next Quarter By Sector[ Base: All NI Respondents – n=500 ]


Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

5

59

27

9

22

38

31

9

12

42

41

6

28

38

25

10

21

45

29

5

18

38

37

6

35

28

25

11

Increased

Remained the same

Decreased

Don’t know / NA


n=500%

n =

*Small Bases

Period Covering

74

18

7

52

24

16

8

52

24

16

6

53

26

17

7

51

25

18

4

49

29

18

7

50

26

15

8

44

33

14

9

44

33

18

7

42

34

17

9

44

30

18

10

41

31

30

9

39

22

37

6

38

19

43

6

36

15

NI – Business Profitability Over Past Quarter[ Base: All NI Respondents – n=500 per quarter ]

Increased

Remained the same

Decreased

Don’t know / N/A

Period Covering













Quarter 1


Oct-Dec’08

2005 / 2006 2006 / 2007 2007 / 2008 2008 / 2009

75

43

6

36

15

NI – Business Profitability Over The Past Quarter By Sector [ Base: All NI Respondents – n=500 ]


Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

0

45

55

0

19

25

44

13

7

42

49

1

15

43

36

6

14

38

43

6

19

35

38

8

17

33

48

3

Increased

Remained the same

Decreased

Don’t know / NA


n=500%

n =

*Small Bases

Period Covering

76

12

7

50

31

11

7

50

32

9

6

51

34

8

5

42

45

11

4

47

38

11

6

40

43

8

7

40

46

7

9

41

44

13

7

39

41

11

9

38

42

13

11

38

38

17

9

41

33

32

10

37

22

30

7

43

20

NI – Expectations Of Business Profitability Over The Next Quarter[ Base: All NI Respondents – n=500 per quarter ]

Increased

Remained the same

Decreased

Don’t know / N/A

Period Covering













Quarter 1


Oct-Dec’08

2005 / 2006 2006 / 2007 2007 / 2008 2008 / 2009

777

30

43

20

NI – Expectations Of Business Profitability Over The Next Quarter [ Base: All NI Respondents – n=500 ]


Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

9

59

32

0

16

40

31

12

16

42

38

4

28

38

28

7

21

45

31

3

15

46

32

7

33

34

24

9

Increased

Remained the same

Decreased

Don’t know / NA


n=500%

n =

*Small Bases

Period Covering

78

73

79

11

10

2

73

15

9

4

76

11

9

5

74

11

63

75

16

15

3

64

17

73

79

11

8

4

73

14

91

67

23

8

4

71

17

10

3

70

17

14

2

73

12

15

2

75

8

19

1

72

8

NI – Number Of Employees Over Past Quarter[ Base: All NI Respondents – n=500 per quarter ]

Increased

Remained the same

DecreasedDon’t know /

N/A

Period Covering













Quarter 1


Oct-Dec’08

2005 / 2006 2006 / 2007 2007 / 2008 2008 / 2009

79 1

19

72

8

NI – Number Of Employees Over The Past Quarter By Sector [ Base: All Respondents – n=500 ]


Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

5

91

5

0

16

59

22

3

3

65

33

0

4

75

20

1

3

68

27

2

7

74

18

2

11

75

14

0

Increased

Remained the same

Decreased

Don’t know / NA


n=500%

n =

*Small Bases

Period Covering

80

3 3

76

18

34

80

14

34

82

11

25

74

19

54

75

17

53

75

17

42

80

14

44

72

20

51

77

16

24

79

15

43

77

16

61

82

11

72

79

11

10

3

80

8

NI – Number Of Employees Over Next Quarter[ Base: All NI Respondents – n=500 per quarter ]

Increased

Remained the same

DecreasedDon’t know /

N/A

Period Covering













Quarter 1


Oct-Dec’08

2005 / 2006 2006 / 2007 2007 / 2008 2008 / 2009

813

10

80

8

NI – Expectations Of Business Employees Over The Next Quarter [ Base: All Respondents – n=500 ]


Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

5

95

0

0

18

59

19

3

1

74

23

1

8

78

7

7

6

82

9

3

7

82

10

2

8

87

4

1

Increased

Remained the same

Decreased

Don’t know / NA


n=500%

n =

*Small Bases

Period Covering

82

20

33

36

4

NI – Optimism That Government Will Improve Business Conditions Over The Next 3 Years



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

0

32

27

41

3

44

25

19

9

43

29

16

8

29

40

14

5

42

33

12

4

34

37

19

3

35

33

22


n=500%

n =

*Small Bases

Very optimistic

Fairly optimistic

Fairly pessimistic

Very pessimistic

(Don’t know) (7) (0) (9) (3) (8) (8) (6) (8)

Period Covering

83

5

13

59

17

NI – Optimism Regarding Business Performance Over The Next 3 Years



Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

45*%

70%

40*%

65%

65%

125%

90%

5

54

23

14

13

56

16

6

7

57

17

9

18

60

14

3

21

60

9

3

19

60

12

3

23

61

6

3


n=500%

n =

*Small Bases

Very optimistic

Fairly optimistic

Fairly pessimistic

Very pessimistic

(Don’t know) (7) (5) (9) (10) (6) (6) (6) (8)

Period Covering

84

4

11

45

36

7

21

49

18

10

22

47

13

17

21

46

9

27

24

34

8

38

23

32

2

NI – Expectations For NI Economy Over The Next 3 Years [ Base: All Respondents – n=500 ]

Northern Ireland Sector Analysis – Q3

Agricultu

re, forestry and fishi

ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

45*%

70%

40*%

65%

65%

125%

90%

5

23

59

9

0

25

34

31

3

42

20

30

0

36

42

21

8

36

32

20

0

35

38

25

3

28

42

19

n =

*Small Bases

Strong growth

Moderate growth

Strong recessionNo difference or

change

(Don’t know) (4) (6) (8) (8) (7) (5) (5) (9) (4) (1) (5) (2) (9)





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering

85

86

• During Quarter 3 (October - December’08) of tracking, less than 1 in 10 (8%) ROI businesses had experienced an increase in turnover over the three month period, revealing a significant downward trend since the same period last year (32%). Over a quarter (28%) stated their turnover had remained the same, with the majority (61%) of businesses recording a decline in turnover. Expectations for the incoming quarter (January - March’09) also revealed a downward movement over the past 12 months, with only 14% of ROI companies anticipating an increase in turnover, compared to 37% in January 2008. Almost half (47%) were bracing themselves for a decline.

• Similarly, less than 1 in 10 (7%) businesses in ROI recorded an increase in profitability over the past three months, again revealing a consistent downward trend on previous quarters (Quarter 3 2007 / 2008 = 28%). Over half (53%) experienced a decrease, with slightly smaller proportions (37%) stating their profitability remained the same. As with business turnover, expectations for the incoming quarter also dropped back significantly, with only 14% expecting an increase in their profitability during the January – March’09 period, compared to 32% at the same point last year. Over 2 in 5 (42%) were anticipating a decline in profitability over the next three months.

Executive Summary

87

• Fewer than 1 in 10 (6%) businesses in ROI increased their level of employees over the past three months period, again revealing a continuing downward trend. For almost a third (30%) of businesses, employee levels had actually decreased. With regard to the incoming quarter, only 3% were expecting to increase their employee levels, with some 18% anticipating a further drop in employee numbers. Three quarters (75%) predicted their employee levels were likely to remain the same.

• A third (33%) of ROI businesses were optimistic that Government would improve business conditions over the next 3 years, however, as with NI businesses, the majority (63%) remained pessimistic that the Government would achieve this. The proportion of businesses ‘very pessimistic’ was highest in the construction, retail / distribution and other services industry sectors.

• Encouragingly, three quarters (75%) of ROI businesses were optimistic about their own business performance over the course of the next 3 years, a perception that was consistently high across all industry sectors with the possible exception of the construction sector.

• At the same point last year, over 1 in 5 (21%) businesses believed the ROI economy would experience strong recession over the course of the next 3 years. In January 2009, the proportion of businesses predicting this had almost doubled (40%). In contrast, 34% of businesses are anticipating moderate growth, and only 2% strong growth in the ROI economy.

Executive Summary

88

20

9

39

38

21

3

37

39

25

6

38

32

34

4

39

24

49

2

32

16

61

3

28

8

RoI – Business Turnover Over Past Quarter [ Base: All Respondents – n=500 ]

RoI Sector Analysis – Q3

Agricultu


ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

15*%

35*%

55%

120%

85%

135%

55%

16

30

54

0

11

25

64

0

3

21

72

4

11

36

48

4

10

34

50

5

5

19

75

1

10

32

57

1

n =

*Small Bases

Increased

Remained the same

Decreased

Don’t know / N/A





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering

89

13

3

41

43

16

3

38

42

15

6

42

37

19

6

40

35

36

6

41

17

47

6

33

14

RoI – Expectations Of Business Turnover Next Quarter [ Base: All Respondents – n=500 ]


Agricultu


ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

15*%

35*%

55%

120%

85%

135%

55%

8

22

55

15

15

28

51

6

5

21

69

5

13

42

41

4

20

33

42

5

15

33

46

7

15

36

42

7

n =

*Small Bases

To increase

To remain the same

To decreased

Don’t know / N/A





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering

90

23

4

40

33

22

7

45

26

21

8

43

28

36

6

37

20

47

3

40

10

53

3

37

7

RoI – Business Profitability Over The Past Quarter [ Base: All Respondents – n=500 ]


Agricultu


ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

15*%

35*%

55%

120%

85%

135%

55%

9

54

38

0

5

27

68

0

5

25

68

1

6

46

45

3

13

38

44

5

3

34

58

4

10

36

51

2

n =

*Small Bases

Increased

Remained the same

Decreased

Don’t know / N/A





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering

91

12

4

42

42

17

6

38

38

15

7

46

32

22

6

43

29

38

6

39

16

42

4

40

14

RoI – Expectations Of Business Profitability Over The Next Quarter [ Base: All Respondents – n=500 ]


Agricultu


ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

15*%

35*%

55%

120%

85%

135%

55%

0

30

63

8

5

39

53

3

6

26

62

5

14

46

36

4

22

45

32

2

13

40

42

5

19

35

40

6

n =

*Small Bases

To increase

To remain the same

To decreased

Don’t know / N/A





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering

92

12

3

63

22

13

1

67

19

14

2

71

13

13

2

75

10

21

1

68

9

30

2

63

6

RoI – Number Of Employees Over The Past Quarter [ Base: All Respondents – n=500 ]


Agricultu


ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

15*%

35*%

55%

120%

85%

135%

55%

7

70

22

0

8

58

34

0

3

42

52

3

8

66

24

3

7

57

33

3

2

70

26

1

8

71

22

0

n =

*Small Bases

Increased

Remained the same

Decreased

Don’t know / N/A





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering

93

71

78

13

71

76

16

72

76

15

62

78

15

17

4

74

5

18

4

75

3

RoI – Expectations Of Number Of Employees Over The Next Quarter [ Base: All Respondents – n=500 ]


Agricultu


ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

15*%

35*%

55%

120%

85%

135%

55%

7

78

15

0

5

55

34

6

1

68

23

8

3

76

17

5

5

74

16

5

2

82

14

2

4

75

19

2

n =

*Small Bases

To increase

To remain the same

To decreasedDon’t know / N/A





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering

94

RoI – Optimism That Government Will Improve Business Conditions Over The Next 3 Years

[ Base: All RoI Respondents – n=500 ]

28

35

29

4

RoI Sector Analysis

Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

15*%

35*%

55%

120%

85%

135%

55%

0

63

30

8

8

17

48

27

4

31

31

32

5

28

34

26

8

30

34

20

1

24

42

32

1

36

23

36

RoIQuarter 3Oct-Dec’08

n=500%

Very optimistic

Fairly optimistic

Fairly pessimistic

Very pessimistic

(Don’t Know) (4) (0) (0) (3) (7) (8) (2) (4)

n =

*Small Bases

Period Covering

95

4

17

62

13

RoI – Optimism Regarding Business PerformanceOver The Next 3 Years

[ Base: All IoI Respondents – n=500 ]

RoI Sector Analysis

Agriculture,

forestry and

fishing


drinks, textiles,


Construction

and trades

men

Service –

professional


and catering

Service –

retail / distribu

tion

Other servic

es

15*%

35*%

55%

120%

85%

135%

55%

16

69

15

0

11

59

16

8

5

53

28

7

17

60

15

5

17

67

13

2

9

65

19

1

19

56

15

7

RoIQuarter 3Oct-Dec’08

n=500%

Very optimistic

Fairly optimistic

Fairly pessimistic

Very pessimistic(Don’t Know) (4) (0) (0) (3) (7) (8) (2) (4)

n =

*Small Bases

Period Covering

96

15

21

55

7

17

25

51

4

21

19

52

4

19

18

54

5

22

18

52

2

40

19

34

2

RoI – Expectations For RoI Economy Over The Next 3 Years [ Base: All Respondents – n=500 ]

ROI Sector Analysis – Q3

Agricultu


ng

Manufacturing of

food, drinks,

textiles, clothing

and electroni

cs

Constructi

on and

tradesmen

Service –

professional

Service –

leisure, hotels,

and catering

Service – retail

/ distributio

n

Othe

r service

s

15*%

35*%

55%

120%

85%

135%

55%

8

25

45

22

0

22

50

22

0

36

42

22

3

38

43

14

5

30

37

26

1

40

37

16

1

28

38

25

n =

*Small Bases

Strong growth

Moderate growth

Strong recession

No difference or change

(Don’t know) (2) (3) (3) (5) (6) (4) (0) (6) (0) (3) (2) (5) (9)





Quarter 1


Oct-Dec’08

2007 / 2008 2008 / 2009

Period Covering