And more than 80pc of firms questioned said they were not exporting, according to the latest assessment of the SME sector from cross border development body InterTrade- Ireland.
Its Business Monitor survey for the second quarter found that the number of companies that were growing fell to 29pc between April and June compared with 37pc in the first three months of the year.
Dr Eoin Magennis, InterTradeIreland’s economist and policy research manager, said the dip aligns with what is emerging from other similar surveys.
“This could be related to external factors, such as weak growth in the eurozone market, or to the increased speculation about a rise in interest rates,” he said.
“Businesses also remain concerned about cost inflation and the linked and growing issues of cash-flow and late payments.”
About 750 companies in both Northern Ireland and the Republic were interviewed over the telephone for the survey across various sectors.
More than two-thirds said that they had plans to invest in their business over the next 12 months, while about a half said they intended to increase their marketing activity, followed by investment in staff training.
Other key findings included:
l 37pc of businesses reported an increase in sales this quarter. The percentage was higher in exporting companies at 55pc.
l 11pc of firms reported an increase in staff, the highest since 2009.
l 82pc of firms surveyed are not currently exporting, but about one in five, or 19pc, have a product suitable for export but simply aren’t doing it.
l The main challenges to exporting included a lack of time or management resources, the perceived cost associated with entering new markets, a lack of internal financial resources and a lack of awareness about supports.
Dr Magennis said it was vital that exporters are encouraged and supported.
Meanwhile, a one-stop shop website for small businesses setting out all the Government supports available to them has had more than 12,000 unique users since it was unveiled in late May, the Government has said.
The Department of Finance, which launched the site, said it has also had a 40pc return rate as it gets updated each month with the latest supports.
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