Majority of CEOs expect no growth this year

ALMOST NINE out of 10 business leaders do not expect the economy to start growing again until at least next year, according to the results of a survey due to be published today.

The PricewaterhouseCoopers Irish Chief Executive Officer Pulse Survey, which is being published today, shows 88 per cent of business leaders do not expect the economy to return to growth until 2012 or later.

About half of those surveyed expect revenues and profits to grow over the next 12 months, but this will be driven by new product development and by exploring new markets.

A majority of them – 56 per cent – believe global economic performance will be the most critical factor in any Irish economic recovery.

They say the International Monetary Fund (IMF) prediction of 4.5 per cent growth in the world economy in 2011 and 2012 should have a positive impact on Ireland.

One of the survey’s more positive points is that the CEOs of the multinationals operating here say their companies are committed to remaining in Ireland.

Almost three-quarters say they will either maintain their Irish presence or increase it. However, they warn that cost competitiveness and the retention of the Republic’s 12.5 per cent tax rate on corporate profits are critical to the multinationals operating here.

A clear majority also want the Government to take steps to restore confidence and stimulate economic growth: 70 per cent want the coalition to implement a “robust” national recovery plan and 68 per cent say public sector reform must be a top priority.

In terms of their own businesses, 85 per cent of CEOs agree finance is less easily available than a year ago, and 60 per cent say controlling and cutting costs is their biggest priority for the year ahead.

Commenting on the results, PricewaterhouseCoopers senior partner Ronan Murphy said that by accepting economic realities and restructuring their businesses accordingly, many Irish companies have demonstrated their resilience.

“Those businesses which are further advanced in their response are now beginning to focus on planning for, and achieving, growth,” he said.

Minster for Enterprise Richard Bruton said the the study provides valuable insight into the views of CEOs on the business environment and the economy generally.

“The survey . . . contains important lessons to Government from business, which I will take on board,” he added.