Business says economy will remain buoyant

A majority of business leaders expect further growth in the Irish economy this year, according to the latest Bank of Ireland confidence survey.

However, a significant number were concerned that global events could harm the economy here. The survey was conducted in November by Irish Marketing Surveys with 190 chief executives or heads of finance.

Some 15 per cent predicted a decrease in Irish economic growth in the year ahead. This compares with six per cent in the last survey conducted in August. Some 29 per cent of respondents expected economic growth to stay the same, with 54 per cent expecting an increase in growth.

While many were cautious about the economy, the survey found that business leaders were more confident about prospects for their own business.

Some 78 per cent of respondents anticipated an increase in their company's turnover in 1999, with just seven per cent expecting turnover to decrease and 15 per cent expecting it to stay the same.

While 57 per cent of exporters were optimistic about the economy, this was back from the 64 per cent recorded in August. The proportion of exporters anticipating a decrease in exports rose to 10 per cent, the second highest level since August 1996.

According to Bank of Ireland, "it may be that with EMU now virtually a reality, some exporters feel more uncertain of the climate for export sales, particularly as our major trading partner remains outside the single currency".

"Across the industry sectors, representatives of the electronics industry appear the most pessimistic regarding the prognosis for overseas sales, while those in manufacturing have high expectations for the year ahead," it added.

On the subject of inflation, 55 per cent of those surveyed expected inflation to "hold relatively steady", with 25 per cent expecting prices to rise. This was the lowest level ever recorded in the Bank of Ireland survey.

On employment 41 per cent of business leaders expected to take on additional employees this year. Some 44 per cent anticipated that employment at their firms would remain stable.

On an industry basis, those in distribution and services especially expected to increase their employment numbers, with electronics and manufacturing the most downbeat sectors about employment.

The euro would have a beneficial impact on the Irish economy said 63 per cent of respondents. However, one in eight feared that the euro would have a negative effect on the Irish economy. When asked about their own businesses, 53 per cent said the euro would have no influence - good or bad.

The survey showed a sharp decrease in those against participation in the euro without the UK. In August some 22 per cent said the Republic should not join the euro zone without the UK, but this has now dropped to nine per cent, with 88 per cent in favour of participation and three per cent expressing no opinion.