Growth in SME sector holding in second quarter, says monitor
Two in five small and medium-sized enterprises (SMEs) reported growth during the second quarter of the year, the highest level in over two years.
The latest ‘All-Island Business Monitor’ shows more than half of SMEs remain stable, with contraction described as rare, as only 7% reported decline.
The study shows that SME sentiment across the island is “holding steady, with modest growth in evidence, but rising costs and tighter margins mean resilience is being tested”.
More than 750 business managers across the Republic of Ireland and Northern Ireland were surveyed as part of the research for InterTradeIreland, the all-island economic development agency.
It found that costs remain the most significant headwind, cited by six in ten businesses.
Over a third reported cost increases of more than 10% over the past two years, in areas such as wages, energy and insurance.
As a result, almost half of the respondents said they have raised prices in the last six months, and three in ten expect to do so again.
A quarter of businesses said they are tackling the challenge of rising overheads by taking action relating to energy and operational efficiencies to cut costs.
The All-Island Business Monitor found that a fifth of businesses reported global politics and trade uncertainty as an issue in Q2 of 2025, which is down from a third in the previous quarter, in the immediate aftermath of the US tariff announcements.
One in ten businesses across the island reported feeling exposed to the impact of the tariffs.
InterTradeIreland Director of Strategy Martin Robinson said the growth reported by SMEs is “modest and broad-based rather than high”.
“At the same time, profitability pressures are emerging, which is unsurprising, given the persistent cost challenges businesses are facing.”
He said resilience and modest growth define the moment, but “persistent costs and tighter margins are weighing on firms.”
“In this context, cross-border trade can play a vital role in strengthening business resilience,” he added.
Minister for Enterprise Peter Burke said SMEs are “the backbone of our economy, and I am committed to supporting their growth and resilience.”
He said his department recently established the Cost of Business Advisory Forum to examine and reduce the cost of doing business.
Minister Burke said a range of supports are available to help businesses become more efficient and competitive.
Stormont’s Minister for the Economy Caoimhe Archibald said the latest Business Monitor “once again highlights the resilience of our business community in what is still an uncertain trading environment”.
“The challenges are real, and I don’t underestimate them, but I am determined to ensure our businesses have the support they need to thrive.
“My tariffs working group also continues to meet regularly to deal with ongoing trade issues,” she added.
Minister Archibald said InterTradeIreland’s trade hub is also a “valuable resource for companies eager to grow across the island”.
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