Almost half (46%) of Irish SMEs say business activity is stronger than it was this time last year, and up sharply from 30% in Q1 of this year, according to the latest Linked Finance Business Optimism Index, signalling the strongest trading momentum in more than a year.
The latest quarterly survey of Irish SMEs, conducted by Ipsos B&A on behalf of Linked Finance, also found overall business confidence remained resilient, with optimism in the sector edging up from 63.46 in Q1 to 63.92 in Q2.
Irish SMEs report strong trading
Businesses are also more optimistic about the months ahead than at any point in the past 18 months, underlining growing confidence that this momentum will continue into the second half of the year in spite of signs of renewed inflation.
Inflationary pressures re-emerge
The proportion of SMEs increasing prices rose to 46% in Q2, up from 42% in Q1, representing the highest level recorded in the survey for two years. The trend was evident across businesses of all sizes and regions.
The data indicates that while confidence remains resilient, cost pressures continue to weigh on business decision-making.
Trading conditions continue to improve
Almost half (46%) of SMEs said business activity was stronger than a year ago, compared with 30% in Q1, while expectations for Q3 reached their highest level since early 2025, signalling growing confidence that trading conditions will continue to improve.
The improvement was particularly noticeable among exporters, whose outlook is now more positive than businesses focused solely on the domestic market following a weaker start to the year.
Hiring pauses after sustained growth
Following two consecutive quarters of employment growth, hiring has begun to level off.
Almost four in five SMEs (79%) reported no change in staffing levels during the quarter, while 11% increased headcount, suggesting businesses are taking a more cautious approach to recruitment as inflationary pressures re-emerge.
Despite the slowdown in hiring, Dublin-based businesses continue to outperform the rest of the country on both employment and expectations for future business activity.
Strong expectations for H2
Commenting on the findings of the latest survey, Niall O’Grady, CEO of Linked Finance, said: “What’s particularly encouraging from these findings is that confidence continues to strengthen even as businesses contend with rising cost pressures.”
“SMEs are clearly finding opportunities for growth, but they’re also becoming more cautious as inflation begins to re-emerge in the second half of the year.”
“The increase in businesses raising prices is a reminder that many SMEs are still operating in a challenging cost environment. Access to finance will remain critical in helping businesses invest, grow and manage that uncertainty over the rest of the year.”
The Linked Finance Business Optimism Index is based on a quarterly survey of 370 business owners and managers nationwide, conducted by Ipsos B&A. Figures reported as gaps (e.g. +8, -16, +39) are net balance scores – the percentage of SMEs reporting an increase minus the percentage reporting a decrease. The Optimism Index is reported on a 0–100 scale. Fieldwork ran from 25th June to the 8th July 2026 by telephone and online. Sample structured by region and company size to reflect the SME population. Margin of error ±5%.
For media enquiries or to schedule an interview, contact Beachhut PR:
Aaron Linnane | [email protected] | +353 87 419 5919
About Linked Finance:
Founded in 2013, Linked Finance is a Central Bank of Ireland–regulated SME lender providing unsecured loans of €10,000 to €500,000 to businesses nationwide. The company has now delivered over €400 million in funding to more than 5,000 Irish SMEs, supporting investment, expansion and working capital needs across the country. Linked Finance combines regulatory oversight with established scale, offering businesses a credible alternative source of finance.
The model is built around fast, clear decision-making, with relationship-led underwriting that balances speed and diligence. In addition to lending, Linked Finance publishes its quarterly SME Business Optimism Index, providing insight into trading conditions, sentiment and pressure points across the Irish SME sector. Linked Finance has supported a broad range of well-known Irish businesses including VitHit, Cornucopia, Chopped, SchoolBooks.ie, Cloud Picker Coffee and Leo Burdock.
See more breaking stories here.