- 91% of SMEs cite energy and transport costs as top risk factor, with cost of materials (86%) and availability of skilled labour (76%) other major concerns
- Firms reporting a greater focus on doing business in EU markets and a shift away from the US against a backdrop of ongoing US tariff uncertainty
- Substantial shift in SMEs’ motivation for seeking finance – growing turnover of existing products/services is now the main driver of SME borrowing, with borrowing to address supply chain disruption receding
- Majority of Irish SMEs are showing less appetite to innovate in favour of getting more from their existing activities
The rising costs of energy, transportation and materials are the biggest concerns for Irish SMEs in 2026, according to new research published by the Strategic Banking Corporation of Ireland (SBCI).
The SBCI is the State’s promotional financial institution that has channelled €5bn in funding to over 67,000 Irish SMEs to date.
The research suggests that nine in ten (91%) SMEs said rising costs of energy and transportation represent a key risk, up from 68% last year. Meanwhile, 86% said the cost of materials is a key risk, up from 73% in 2025.
Three-quarters (76%) said the availability of skilled labour was a key risk, up from 67% last year.
The survey suggests that far more Irish SMEs are now trading with the EU (59% this year, compared with 33% in 2025) while the number of those trading with the US has reduced sharply against a backdrop of ongoing US tariff uncertainty (33% this year, compared with 46% last year). However, the number of firms reporting tariffs as their biggest risk has fallen from 69% to 55%.
Other key findings:
- Perceived uncertainty among SMEs has increased since 2025, with the share of SMEs reporting a high level of certainty falling from 61% in 2025 to 49% in 2026.
- 65% expect their financial position to improve in the next 12 months compared to 70% in 2025.
- Just over half (54%) of SMEs plan to hire more employees, compared with 60% in 2025.
- SMEs continue to obtain finance, with increasing turnover of existing products and services becoming the number one reason for borrowing.
- Appetite for innovation has eased, with 40% saying they had no expected product or service innovation planned for this year – up from 21% in 2025.
The reasons for SMEs obtaining finance appear to have shifted. Now, rather than responding primarily to short-term disruption, finance is increasingly being used to support turnover growth.
Increase in SME sustainable investment
The survey also suggests that sustainability for SMEs is becoming more mainstream; 32% of SMEs said they are actively investing and plan to invest more compared to just 19% in 2025.
Furthermore, 29% of SMEs said they are planning to invest in sustainability, compared with just 20% in 2025.
Meanwhile, the survey suggests that the biggest motivation for green investment is cost reduction (43% in 2026, compared with 32% last year).
Colin Moran, Chief Executive of the SBCI, said:
“As Ireland’s promotional financial institution and a supporter of over 67,000 Irish SMEs, we are committed to understanding and supporting Irish businesses facing pressures in the current business climate and providing finance solutions to assist them in navigating these pressures.
Our latest SME research shows firms remain confident, despite rising costs, and are preparing sensibly for the future, while their priorities are shifting in line with both domestic and international economic developments.
It is encouraging to see that Irish businesses have clear, appropriate plans in place to invest where necessary so they can maximise their chances of commercial growth.
We will continue to provide finance solutions that can aid in that growth and support the revenues and jobs generated by SMEs that make up such an important part of the Irish economy.”
