Annual Survey Shows Irish Exporters Remain Upbeat about Prospects for 2012– but they have Major Concerns PDF Print E-mail

Wednesday, 23rd November 2011 (Source: Irish Exporters Association Press Release)

• Business cost base rising - Three out of four reporting increases over the past 12months.
• Access to finance- Four out of five reporting no improvement since last year.
• Bad debts have risen –with 52% of exporters affected.
• Export Credit insurance still a problem- 87% of exporters believe there should be a government supported export credit insurance scheme.
• High degrees of dissatisfaction with Government agencies grant application process.
• Over 75% say that government red tape as having adverse impact on their business.
• Nine out of ten exporters believe that there would be no benefit to the Irish economy from leaving the Eurozone.

At the launch (today 23 November at 5.00pm) of the IEA Export Ireland Survey publication, the IEA Chief Executive John Whelan stated, ''Optimism and confidence amongst exporters is clearly expressed in this Survey , with 80% forecasting an increase in exports next year, and also planning to invest in new products and to recruit new sales/ marketing staff.'' He went on to say; ''Exporters are putting out a strong message that economic growth can be export led over the next few years.’’

''However, he concluded - this message must be taken in conjunction with the other key messages from exporters outlined in the Survey – the cost base for exporters is still a problem , with labour costs identified as the number one concern , followed by trade finance and energy costs.''  The report was carried out by the Irish Exporters Association in collaboration with Grant Thornton.

Patrick Burke, Partner with Grant Thornton stated, ''Exporters continue to play a critical part in the rejuvenation of the Irish economy. While export led growth is being achieved this report identifies a number of key areas which require action. Strain is particularly evident in the area of the competitiveness of our cost base."

About the Survey: The Export Ireland Survey is an annually published study, first undertaken in 1999, which aims to establish a comprehensive overview of the export sector. The survey’s broadly consistent approach is an important feature in increasing the value of the report’s findings year-on-year, allowing for the emergence of comparable recognisable trends. The survey invites some 1,500 companies to participate reflecting the number of companies in the national exporter population, balancing multinational and small and medium sized enterprises from both manufacturing and services sectors.

About Grant Thornton: Grant Thornton in Ireland comprises over 400 partners and staff operating from offices in Dublin, Limerick, Galway and Kildare. The firm provides a comprehensive range of services including audit, financial planning, and advisory services to public interest entities, privately held businesses, and the financial services sectors.

Further Information: Some of the other major findings from the report are:

Currency Issues
• The survey found that nine out of ten exporters believe that there would be no benefit to the Irish economy from leaving the Eurozone.
• The survey also shows that in established markets of Britain, North America and the Eurozone that exporters conduct 70% of their trade via open account.
• Currency risk is managed by the vast majority of exporters in a relatively straightforward manner with currency accounts used by 23% and forward contracts by 20%.
• The vast majority of exporters (72%) did not experience any difficulty obtaining trade finance from their bank last year

Finance and Banking Issues
• The survey showed that over half of the companies responding said that they financed exports through own funds and the vast majority of exporters (72%) did not experience any difficulty obtaining trade finance from their bank last year
• Just over one in four companies responding did experience some difficulty and the main reasons cited were failure on behalf of the banks to understand the exporter’s business (23%), numerous changes to the banks relationship team (23%) and being informally told that the lending application would not be successful (23%).
• Four out of five exporters report that access to finance has not improved since last year.

Credit Management
• The number of exporters suffering bad debts rose to 52% compared to 42% in the 2010 survey.
• Late payment is also causing problems for some exporters and the major causes of late payments are deliberate late payment to assist cash flow (39%), financial difficulties (26%) and querying of accounts (19%).
• As a last resort, legal action remains the most common method for pursuing overdue accounts. In terms of location, the major areas of risk identified are Ireland (42%), Europe (16%) and the UK (12%).
• There has been a significant increase in the use of credit insurance with 24% of companies reporting having availed of export credit insurance in 2011 up from the 15% which reported using credit insurance in 2010
• As a last resort, legal action remains the most common method for pursuing overdue accounts. In terms of location, the major areas of risk identified are Ireland (42%), Europe (16%) and the UK (12%).

Support for Exporters
• The survey showed that the most frequently used process by exporters for identifying sales opportunities was their own marketing efforts. Some 60% of exporters never use Irish embassies and 29% never use Enterprise Ireland Offices in the sales identification process.
• Dissatisfaction is also high with respect to information provided by the Government to create awareness on the variety of schemes on offer such as the Applied Research, Going Global, Seed & Venture Capital, Job Expansion Funds and the Innovation Fund Ireland schemes.
• Three out of four respondents state that overly bureaucratic decision-making by state organisations/government departments impact on their business

ENDS
To receive a hard copy of the publication, please contact Monica Duff, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
The publication will also be available to download on the IEA website www.irishexporters.ie next week.