Growth to return by 2010-2011, 76% of Irish executives say

NEARLY A third (32 per cent) of Irish business leaders expect their operations to return to growth next year with 44 per cent expecting the upturn to happen in 2011, according to a survey of 800 senior executives carried out by PricewaterhouseCoopers (PwC).

However, the survey also found that most companies are continuing to restructure and retrench, despite a more optimistic outlook.

Changes in personnel is the most popular form of restructuring, with 56 per cent of respondents saying that they are undertaking or planning to undertake workforce restructuring and reduction in a bid to cut costs.

The survey found that the winding down or disposal of underperforming or non-core operations was the next most significant strategy with nearly a third (30 per cent) of respondents undertaking these activities.

According to the survey, changes in remuneration are also being actively considered by a substantial percentage of companies.

Nearly half (45 per cent) of participants said that they are reviewing basic salaries while 30 per cent of respondents said they are overhauling annual bonus plans.

The PwC survey also found that companies are actively planning to expand into new markets, with nearly half of survey respondents (48 per cent) reporting that they are planning to access new markets or launch new products.

Separately, a survey of 1,000 chief executives in Ireland conducted by property consultants CB Richard Ellis has found that more than three-quarters of respondents expect the economy to shrink again in 2010, although most believe that this contraction will not exceed 5 per cent.

Funding issues arising from the global credit crunch were identified as having the most negative impact on the economy this year according to the survey.

However, more than half of Irish chief executives expect the availability of bank funding to improve next year. On unemployment, 57 per cent said that they believe the number out of work will increase slightly next year. Most expect unemployment to peak between 13 and 15 per cent.

“While an air of pessimism generally pervades, it is becoming increasingly clear that business leaders believe that things will start to slowly improve in 2010 and this is certainly encouraging,” commented Guy Hollis, managing director of CB Richard Ellis, Ireland.