High energy costs lead to reduction in business profitability

- Confidence in the Irish economy remains high through changing business environment -

Cork Chamber, the voice of business in Cork, has published its latest Economic Trends, proudly supported by Permanent TSB. Cork Chamber members shared their experiences through the most recent business quarter Q1 2023, their outlook for the second quarter of 2023 and views on the ongoing business impact of high energy costs and skills gaps.

The Q1 2023 survey found:

  1. 73% of respondents are experiencing reduced profitability due to high energy costs

  2. 64% say skills shortages are fuelling wage demands and inflation

  3. 52% are investing in upskilling and re-training to combat skills gaps

  4. 85% expressed confidence in the Irish economy

“The results from this Q1 2023 survey demonstrate the resilient nature of the Cork business community. While 73% of businesses reported that high energy costs are leading to a reduction in profitability, businesses continue to take real action to cushion the blow of these impacts and reduce their emissions as 8% are investing in on-site renewable energy and 21% are increasing their investment in energy efficiency measures,” said Ronan Murray, President of Cork Chamber.

Auriol Kelly, Business Banking Manager at Permanent TSB commented, “The first quarter shows that business growth remains strong as 42% of respondents increased their headcount, with 58% planning to expand their employee numbers over the next 12 months, up slightly from 53% during Q4 2022. As businesses continue to adapt to a changing environment, Permanent TSB remains committed to supporting the business community.”

Specialist skills shortages remain the biggest barrier to recruitment, a trend that was consistent across 2022. Housing shortages are the second largest barrier to filling vacancies followed by wage demands.

Mr Murray concluded, “It is encouraging that confidence in the Irish economy (85%) continues to rise, however, skills shortages present potential barriers as they remain the top threat to business growth for the past two quarters and to filling vacancies since Q2 2022.

Fortunately, over half of companies are retraining and upskilling their existing workforce force and almost 40% are using flexible working arrangements, signalling that flexible working is more attractive to the current workforce locally and to businesses expanding their global reach to secure talent from outside of our city region.

For Cork to remain competitive, it is important now more than ever that we continue to be focused on the delivery of strategic projects that are enablers for sustainable economic growth in our region. This will ensure Cork remains an attractive location for talent and investment.”

View the full results here: https://www.corkchamber.ie/quarterly-economic-trends/