Irish firms 'expect growth in 2008'

Confidence among small and medium sized businesses in Ireland remains high, with more than three quarters of companies expecting to carry their current momentum into 2008.

The all-island Ulster Bank Business Confidence survey found that the majority of businesses believed they would do as well as or better than they did in 2007, and despite revising plans for investment in staff, premises and new markets, firms are expecting to grow. Only 13 per cent are expecting things to deteriorate.

Northern Irish firms are more optimistic than those in the Republic of Ireland, with 62 per cent and 46 per cent respectively expecting improved performance during the year.

More than 70 per cent of SMEs are planning to grow their business during the coming year and beyond, and the majority of businesses are predicting that any growth will be driven by increased turnover from their existing activities.

However, there is still some caution about the market conditions, with over a third of businesses saying that the market conditions are worse now than 12 months ago.

In the Republic of Ireland, only 37 per cent of firms are planning new hiring to help grow the business, compared to 54 per cent in April last year, while in Northern Ireland that figure has fallen to 31 per cent from 58 per cent. Plans for expansion or moving to new premises are also being scaled back, with only 27 per cent in the Republic expecting to do so, and 19 per cent in Northern Ireland.

"Any increased concern about the market in which businesses operate does not extend to individual companies' expected performance for the year ahead, with growth anticipated and plans in place to hire more staff, albeit at a lower level than six months ago," said Robert Gallagher, chief executive, Ulster Bank Corporate Markets.

"Business sentiment continues to be positive both at a national and regional level but expectations of growth, expansion and moves into new markets have been tempered from earlier in 2007. This demonstrates a resilience and confidence among Irish entrepreneurs in the face of market adversity. The most encouraging finding is that businesses intend to grow in 2008."