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1. Key statistics on small and medium enterprises (SMEs)
In 2012, SMEs (employing less than 250 persons) accounted for 99.7% of active enterprises, 68.0% of persons engaged, 50.3% of turnover and 46.2% of gross value added (GVA). GVA is the gross income from operating activities and is the balance available to enterprises to pay employees and realise a return on investment. It is noticeable that while SMEs employed almost seven in every ten persons in the business economy, they accounted for less than half of GVA. See Figure 1.1 and Chapter 3.
Large (250+) | SMEs (<250) | |
Active enterprises | 0.3 | 99.7 |
Persons engaged | 32 | 68 |
Turnover | 49.7 | 50.3 |
GVA | 53.8 | 46.2 |
2. Categorising SMEs by type of enterprise
In 2012, SMEs generated €42.2 billion in GVA. Irish-owned SMEs that were solely engaged with the domestic economy (no exports or imports) accounted for 37.9% of GVA while they accounted for 63.3% of the employment in all SMEs.
Irish-owned SMEs that engaged in international trade (either exported or imported goods/services) in 2012 accounted for a further 27.7% of GVA while their SME employment share was 25.4%.
Foreign-owned SMEs that engaged in international trade accounted for just less than a quarter of GVA while foreign-owned SMEs solely engaged with the domestic economy accounted for the remaining 10.3% of GVA. While foreign-owned SMEs accounted for almost a third of GVA in all SMEs, they only accounted for 11.2% of total SME employment. See Figure 1.2, Table 1.1 and Chapter 3.
For long labels below use to display on multiple lines | GVA in SMEs |
---|---|
Irish trader | 27.7 |
Irish non-trader | 37.9 |
Foreign trader | 24.2 |
Foreign non-trader | 10.3 |
Table 1.1 GVA and persons engaged in SMEs by type of enterprise, 2012 | |||
GVA | Persons engaged1 | GVA per person engaged | |
€m | No | € | |
Irish trader | 11,669 | 210,982 | 55,308 |
Irish non-trader | 15,989 | 525,077 | 30,451 |
Foreign trader | 10,187 | 60,256 | 169,062 |
Foreign non-trader | 4,334 | 32,980 | 131,413 |
All SMEs | 42,179 | 829,295 | 50,861 |
Source: CSO structural business surveys | |||
1 The persons engaged in this table were taken from the CSO business surveys rather than the CSO Business Demography statistics. |
3. Signs of improvement in the business environment for enterprises
The number of enterprise births (new enterprises created) has fluctuated over the period 2007 to 2012. In 2007 there were nearly 13,500 enterprises births but by 2010 this figure had fallen to just over 11,200. There were signs of improvement displayed in 2011 with over 11,800 new births registered and this trend continued in 2012 when nearly 12,600 new enterprises were set up.
The number of enterprise deaths (enterprises that ceased trading) rose steadily between the years 2007 to 2009 as the economy underwent a major contraction. There was evidence of an improvement in the business environment in 2010 which continued in 2011. In 2010 the number of enterprise deaths was just over 18,300, while in 2011 this figure had fallen to around 18,100 enterprises. See Figure 1.3 and Chapter 4.
Births | Deaths | |
2007 | 13461 | 17263 |
2008 | 11954 | 20601 |
2009 | 13810 | 24511 |
2010 | 11237 | 18308 |
2011 | 11847 | 18076 |
2012 | 12551 |
4. Business productivity in Ireland (GVA per person engaged)
GVA per person engaged was almost €78,900 for all enterprises and over €44,300 for indigenous Irish-owned enterprises.
GVA per person engaged for all micro enterprises (<10 persons engaged) was over €40,700 while for all large enterprises (250+ persons engaged) the figure was almost €149,300.
When the foreign multinationals were excluded, the productivity measure for each of the size classes was reduced considerably. This was particularly evident for large indigenous enterprises where GVA per person engaged at almost €74,700 was approximately half the figure for all large enterprises. See Figure 1.4 and Chapter 5.
Irish-owned | All enterprises | |
Micro (<10) | 33619.7871506837 | 40714.2496720153 |
Small (10-49) | 37733.9291964802 | 49237.9233962652 |
Medium (50-249) | 44241.5573385781 | 66142.0281384378 |
Large (250+) | 74689.2524362487 | 149294.586417337 |
0 | 0 | |
All size classes | 44333.0540548349 | 78851.8990902799 |
5. Business costs facing enterprises
In the total business economy in 2012, nearly €39.2 billion was paid in personnel costs. Almost €5.1 billion or 13.0% of this was in the form of employers’ social security payments e.g. employer's contributions to the PRSI scheme, superannuation funds, PRSA’s and other pension schemes. The percentage was higher for large enterprises at 14.6% compared to SMEs at 11.9%.
Enterprises in Ireland paid a relatively low rate of employers’ social security payments at 13.4% of personnel costs when compared to other European countries. There were only five countries, including the UK at 13.1%, that paid a rate lower than Ireland. The countries that paid the highest rates of employers’ social security costs included Sweden at 31.0%, France at 30.3% and Italy at 28.3%. See Figure 1.5 and Chapter 6.
Social security costs | Wages and salaries | |
SMEs (<250) | 11.9 | 88.1 |
Large (250+) | 14.6 | 85.4 |
Total Business Economy | 13 | 87 |
6. Irish multinationals abroad and foreign multinationals in Ireland
In 2012, Irish multinationals employed almost 246,000 persons in foreign affiliates. These affiliates generated turnover of €75.9 billion. By contrast, foreign multinationals employed near 256,600 persons in affiliates in Ireland. These affiliates generated turnover of almost €183.7 billion. See Figure 1.6 and Chapter 8.
Figure 1.6 Irish MNEs abroad and foreign MNEs in Ireland, 2012
This chapter outlines the key statistics for the Irish business economy in 2012. Business Demography data are used to analyse the number of enterprises and employment across the five key sectors of Industry, Construction, Distribution, Services and Financial & Insurance. The structural business surveys are used to analyse the related financial variables such as turnover, gross value added, gross operating surplus and personnel costs.
Active enterprises and persons engaged
In 2012 there were over 185,500 active enterprises in the business economy, with over 1.2 million persons engaged. See Table 2.1.
The Services sector was the largest sector in terms of active enterprises and persons engaged, with 48.6% of total enterprises and 43.0% of persons engaged. This sector includes a wide range of services such as transportation, accommodation and food, publishing, telecommunications, legal and accounting activities and scientific research.
Construction accounted for 18.3% of all enterprises but only 6.3% of total persons engaged. The Distribution sector (retail and wholesale activity including the sale of motor vehicles) accounted for 22.8% of total enterprises and 26.6% of persons engaged. Industry accounted for 7.3% of all enterprises and 16.2% of total persons engaged. Financial & Insurance activities accounted for only 3.0% of all enterprises and 7.9% of total persons engaged. See Figures 2.1 and 2.2.
For long labels below use to display on multiple lines | Number of active enterprises |
---|---|
Industry | 7.3 |
Construction | 18.3 |
Distribution | 22.8 |
Services | 48.6 |
Financial and Insurance | 3 |
For long labels below use to display on multiple lines | Number of persons engaged |
---|---|
Industry | 16.2 |
Construction | 6.3 |
Distribution | 26.6 |
Services | 43 |
Financial and Insurance | 7.9 |
The Financial & Insurance activities sector and Industry sector had the highest number of persons engaged per enterprise at 17.1 and 14.6 respectively. See Figure 2.3 and Table 2.1.
Number of persons engaged per enterprise | |
Financial & Insurance | 17.0972074938141 |
Industry | 14.5916469893743 |
Distribution | 7.68457711442786 |
Services | 5.81179417273443 |
Construction | 2.26104666607633 |
Turnover
Turnover is the total invoiced by enterprises during the reference period. See Appendix 2 for full definitions.
From a turnover perspective, Industry was the largest sector accounting for 29.2% of the €384.4 billion in total turnover in the business economy.
The Services sector, the largest sector in terms of number of enterprises and number of persons engaged, accounted for 28.4% of turnover. The Distribution sector also accounted for a large proportion of turnover at 27.0%. Financial & Insurance activities[1] accounted for 13.0% of total turnover while the Construction sector only accounted for 2.3%. See Figure 2.4 and Table 2.1.
[1] The Business Operations data for Financial & Insurance activities was calculated using data from banks and insurance corporations only. See Chapter 9.
For long labels below use to display on multiple lines | Turnover |
---|---|
Industry | 29.2 |
Construction | 2.3 |
Distribution | 27 |
Services | 28.4 |
Financial and Insurance | 13 |
Gross value added (GVA)
GVA is the gross income from operating activities and is the balance available to enterprises to pay employees and realise a return on investment. See Appendix 2 for full definitions.
Business sectors generated €100.3 billion GVA in 2012. Industry and Services contributed the most, accounting for 38.0% and 33.4% respectively. Distribution contributed 15.7% of the total GVA with Financial & Insurance activities accounting for 8.9% and Construction accounting for 3.9%. See Figure 2.5 and Table 2.1.
For long labels below use to display on multiple lines | GVA |
---|---|
Industry | 38 |
Construction | 3.9 |
Distribution | 15.7 |
Services | 33.4 |
Financial and Insurance | 8.9 |
Distribution paid the highest proportion of GVA in personnel costs at 59.9% followed by Services with a figure of 55.8%. Construction recorded a figure of 48.3% while Financial & Insurance activities paid 38.5% and Industry paid the lowest proportion at 23.9%. See Figure 2.7 and Table 2.1.
How GVA is used in the business economy
GVA is split between gross operating surplus and personnel costs. Gross operating surplus is the balance available to the enterprise which allows it to provide a return to shareholders, to pay taxes and to finance all or part of its investment. Personnel costs are defined as the total remuneration, in cash or in kind, payable by an employer to an employee. See Appendix 2 for full definitions.
Gross operating surplus accounted for the larger share of GVA in 2012 at €57.7 billion or 57.5%. Personnel costs accounted for €42.6 billion or 42.5% of GVA. See Figure 2.6 and Table 2.1
For long labels below use to display on multiple lines | Breakdown of GVA |
---|---|
Personnel costs | 42.6 |
Gross operating surplus | 57.7 |
Personnel costs as % of GVA | |
Distribution | 59.9073956615502 |
Services | 55.8294093103654 |
Construction | 48.3050847457627 |
Financial & Insurance | 38.4572386808273 |
Industry | 23.8672990749718 |
Total Business Economy | 42.4710925039872 |
Gross operating surplus and personnel costs by broad sector
Industry accounted for over half or 50.3% of the total gross operating surplus in the business economy while Services contributed 25.7%. Distribution accounted for 11.0% while Financial & Insurance activities and Construction accounted for 9.5% and 3.5% respectively. See Figure 2.8 and Table 2.1.
For long labels below use to display on multiple lines | Gross operating surplus |
---|---|
Industry | 50.3 |
Construction | 3.5 |
Distribution | 11 |
Services | 25.7 |
Financial and Insurance | 9.5 |
Services accounted for the largest proportion of personnel costs at 44.0%. Distribution and Industry both contributed just over a fifth each at 22.2% and 21.4% respectively. Financial & Insurance activities accounted for 8.1% of personnel costs while Construction contributed 4.4%. See Figure 2.9 and Table 2.1.
For long labels below use to display on multiple lines | Personnel costs |
---|---|
Industry | 21.4 |
Construction | 4.4 |
Distribution | 22.2 |
Services | 44 |
Financial and Insurance | 8.1 |
Turnover per person engaged | |
Industry | 628.748 |
Distribution | 318.422 |
Services | 189.201 |
Construction | 116.325 |
Total Business Economy | 288.507 |
Turnover per person engaged and GVA per person engaged[1]
Turnover per person engaged and GVA per person engaged are simple measures of labour productivity[2]. Note that the presence of foreign multinationals in Ireland has a significant impact on these measures. In later chapters, labour productivity will be presented with and without foreign multinationals.
Turnover per person engaged averaged over €288,500 in 2012 across all sectors. There were large differences across individual sectors with Industry recording the highest figure at over €628,700 while Construction recorded the lowest figure at over €116,300. See Figure 2.10 and Table 2.1.
[1] These indicators were calculated using the number of persons engaged on the survey forms. Financial & Insurance activities were excluded from this calculation as the number of persons engaged was not available from the survey forms.
[2] Number of persons engaged is used as the measure for labour input rather than the number of full-time equivalents (FTEs).
GVA per person engaged averaged almost €78,900 across all sectors. Each individual sector reported a figure less than the average business economy, with the exception of Industry, which reported GVA per person engaged of over €213,600. This was followed by Services at almost €58,100. The Distribution sector had the lowest GVA per person engaged at nearly €48,400. See Figure 2.11 and Table 2.1.
GVA per person engaged | |
Industry | 213.608 |
Services | 58.086 |
Construction | 50.895 |
Distribution | 48.361 |
Total Business Economy | 78.852 |
Profitability
GVA as a percentage of turnover and gross operating surplus as a percentage of turnover are measures of enterprise profitability.
Specifically looking at gross operating surplus as a percentage of turnover, the objective is to analyse the proportion of sales that remains in the enterprises after all expenses have been paid. Profitability across all sectors in the business economy was 15.0% of turnover.
Industry was the most profitable sector with an operating surplus of 25.9% of turnover. Construction recorded a profitability level of 22.6% of turnover, while Services and Financial & Insurance activities recorded profitability levels of 13.6% and 11.0% respectively. Distribution was the least profitable with an operating surplus of 6.1%. See Figure 2.12 and Table 2.1.
Gross operating surplus as % of turnover | |
Industry | 25.8655532507768 |
Construction | 22.6179775280899 |
Services | 13.5607952933857 |
Financial and Insurance | 10.9932901988977 |
Distribution | 6.08918473706012 |
Total Business Economy | 15.0139306925284 |
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