New survey reveals strong growth of optimism among Irish businesses

Irish business is even more optimistic now than at the beginning of the year, according to the latest Business Confidence Survey. The results of the Bank of Ireland and The Irish Times survey showed that the general mood of optimism is shared in board rooms across the country.

In November, 78 per cent of the managing directors or heads of finance who form the country's top industrial and commercial concerns, said they are expecting an increase in turnover over the next 12 months, compared with 75 per cent in May and 79 per cent last November.

The general optimism was shared by the manufacturing and service sectors of the economy, as well as the export sector, which has undergone a firming of its outlook since the beginning of the year.

Two thirds of exporters are anticipating growth in the coming year, while 26 per cent expect no change and 5 per cent are projecting a decrease.

Confidence in the performance of the economy as a whole is also very high, with 64 per cent of respondents expecting it to grow and 31 per cent, predicting a static situation.

Interestingly, while almost half of the business leaders expect prices for their own company output to remain static, as many as four in 10 are anticipating price rises. One in eight feel that prices for goods and services generated by their companies are likely to decline.

In previous surveys in May and February, a larger number of people were expecting price stability, although the pattern is very similar to November 1996.

The survey also shows the highest level of optimism on employment growth since the survey began in August 1996 - 46 per cent of the corporate leaders expect that they will take on additional employees over the next 12 months and only 12 per cent foresee cutting the numbers at work in their businesses.

Each respondent was also asked to comment on the employment prospects for a hypothetical son or daughter graduating from college this year, compared with a year earlier. Almost 87 per cent felt there were better opportunities now than a year ago, although this is slightly lower than the 90 per cent for February and May.

The respondents were also asked how they would handle a personal windfall of £5,000.

Just over 60 per cent said they would save it, while 37 per cent said they would spend it. This balance was very similar to the levels recorded earlier this year.