Irish SMEs Create Jobs at Fastest Pace Since 2016, but Exporters Face Strain
Irish SMEs are creating jobs at their fastest rate since 2016, but a Linked Finance report reveals a growing divide between thriving domestic firms and struggling exporters. Exporters face declining activity and profitability due to global instability, while cost pressures remain high. Policymakers are urged to reduce uncertainty to support the sector.
Irish SMEs are creating jobs at the fastest pace in nearly a decade, but a significant gap is emerging between domestic-facing firms and exporters, according to the latest Linked Finance business optimism index. The report, conducted by Ipsos B&A among 370 firms from April 16th to May 1st, indicates the employment gap is wider than at any point since 2016.
Overall optimism remains at 63.5 per cent positive, consistent with late 2025. However, exporters are absorbing the costs of renewed global instability, with their activity falling and projected to decline further in Q2. This creates a «two-track SME economy»: domestic firms are steady or expanding, while trade-exposed firms are retreating. Cost pressures are elevated, with 39 per cent more SMEs raising prices than cutting them, and operational profitability has turned negative, particularly in retail and wholesale.
Regarding recent fuel protests, 54 per cent of SMEs agreed to some extent with the protesters, compared to 37 per cent who disagreed. Support rose to 71 per cent among firms with 10 or more employees. One-in-four SMEs outside Dublin described the Government’s response as «very negative», three times the level in Dublin.
Niall O’Grady, Linked Finance chief executive, noted the data confirms a «two-track Irish SME economy». While job creation is strong, it masks real strain among exporters and declining profitability. He emphasized the need for policymakers to reduce uncertainty around costs, trade conditions, and access to finance.