The Q2 2025 All Island Business Monitor 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.
The headline figures show that two in five (39%) businesses reported growth, the highest in over two years, and more than half remain stable. Contraction is rare, with only 7% in decline. Growth is broad-based but modest, with stability and slight increases dominating rather than rapid expansion.
Martin Robinson, InterTradeIreland’s Director of Strategy explains:
"This is the biggest survey of its type. We speak to 750 different SMEs every quarter, and the latest findings point to a business base that is steady. Growth 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.”
The good news is that the vast majority of firms remain in profit, however InterTradeIreland’s longitudinal data shows the share reporting higher margins has eased compared with 2024, with some now operating closer to break even.
Costs remain the most significant headwind, cited by six in ten businesses. Over a third report increases of more than 10% over the past two years in areas such as wages, energy and insurance. In response, nearly half of businesses report they have raised prices in the last six months, and three in ten expect to do so again.
Meanwhile, a quarter of businesses are tackling the challenge of rising overheads by taking action relating to energy and operational efficiencies to cut costs. This highlights an opportunity for more businesses to explore available supports to help boost competitiveness.
According to the All-Island Business Monitor, a fifth of businesses reported global politics and trade uncertainty as an issue in Q2. This has reduced from close to a third last quarter, in the immediate aftermath of the US tariff announcements.
One in 10 businesses across the island feel exposed to the impact of US tariffs. Overall, 13 per cent of businesses said they would value support or guidance in relation to evaluating or managing trade-related risks.
Martin Robinson concludes:
“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. If you would like guidance on how InterTradeIreland can help your business to benefit, get in touch with us.”
View our All-Island Business Monitor Findings
Select here to download a PDF of the AIBM Q2 2025 infographic.
AIBM Key Findings
Every quarter we publish an in-depth summary of the All-Island Business Monitor Key Findings. Here you can read more detail and an economic analysis of our research.
