InterTradeIreland's latest All-Island Business Monitor shows that 49 per cent of SMEs identified energy costs as their primary challenge in Q2 2026, with more than a third absorbing the impact within profit margins.

The quarterly sentiment survey, the largest of its kind across the island, asked for the first time what measures firms were taking to manage rising energy bills.

Overall, 36 per cent are absorbing higher costs within the business, 29 per cent are passing increases on to customers, and 33 per cent are taking none of the above actions. Other steps include 18 per cent investing in energy efficiency, 7 per cent reducing energy use by changing products, services or operating practices, and 4 per cent investing in renewables and energy storage.

Despite testing external conditions, most companies report they are stable (60 per cent), while 35 per cent say they are growing. Six in ten remain profitable.

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Anne-Marie Murphy, Assistant Director of Strategy at InterTradeIreland, said: "The All-Island Business Monitor shows that SMEs remain resilient, with most firms profitable and stable. However, looking beyond quarter-to-quarter fluctuations, the four-quarter analysis indicates momentum slowing, with growth, sales, profitability and hiring intentions having edged downward over the past year. Stability remains the order of the day."

The time series underpinning the monitor highlights longer-term shifts. In 2019, before successive economic shocks, only one in ten businesses were unsure of their profit margin. By Q2 2026, almost half (47 per cent) are uncertain—suggesting firms dealing with persistent cost pressures and geopolitical volatility, rather than financial distress, are finding it harder to gauge margins.

Anne-Marie Murphy pointed out: "Profit margin visibility is not being helped by the uncertainty and volatility many businesses are having to deal with. Firms are operating in an environment where key costs such as labour, energy, and overheads have been on the rise. Although 61 per cent of firms are profitable, just 8 per cent say they are very profitable, while over a third are absorbing rising energy costs rather than passing them on to customers."

When considering future barriers and opportunities, just over half of respondents (52 per cent) are already taking action, prioritising financial resilience and investing in staff to retain key skills.