More than four out of five business leaders believe the Republic is headed for an economic crisis in the next five years, according to a survey by the Institute of Directors in Ireland (IoD).
The survey of 273 IoD members, carried out in early October, involved chief executives, senior executives, non-executive directors and chairpersons of companies. It found 82 per cent of respondents see a crisis as “somewhat likely” or “very likely”.
More than half said the Republic’s domestic economy and banking system are not sufficiently resilient or prepared for this, while 86 per cent said the Government needs to run a budgetary surplus to act as a buffer against future economic shocks.
IoD chief executive Maura Quinn said the survey suggested a cautious attitude among business leaders facing into Britain's exit from the European Union in March.
“As the Irish economy faces significant risks going forward, both at a macro and micro level due to Brexit uncertainty, amongst many other uncertainties, business sentiment appears to have weakened in the third quarter,” she said.
“It is quite clear that Ireland’s business leaders are in a cautious mood and are concerned for the future of business in Ireland.”
The survey, when compared with the IoD’s previous quarterly surveys, shows there is increasingly less appetite to do business in the UK, from 19 per cent in first quarter, to 8 per cent in the second quarter, to 5 per cent in the most recent quarter.
The most significant opportunities for growth are expected domestically (39 per cent) followed by the EU (22 per cent). The US has dropped from 18 per cent in the first quarter to 9 per cent in the third.
It is anticipated that emerging markets will provide significant opportunities for growth for just 5 per cent of respondents.
On the Government’s performance, 82 per cent said its management of the housing crisis has been either “fair” or “poor”. Conversely, two thirds said its performance to date in the Brexit negotiations has been either “good” or “very good”.
More than a quarter of businesses said Brexit was the biggest threat to their business, while 22 per cent said it was the sourcing and retention of talent. Some 57 per cent said they were experiencing increasing difficulties in sourcing talent.
Most business leaders (81 per cent) believe that “enhanced work life balance” will have a “positive” or “very positive” impact on their organisation.