DESPITE ONGOING job losses in sectors such as retail and banking, confidence in the future of the service sector in Ireland is the highest in the European Union, according to the latest International Business Outlook Survey by KPMG.
The accountancy firm says Irish service sector companies expect revenues, new business and job creation will all improve over the next 12 months. KPMG says sentiment regarding business activity in the service sector is well ahead of the EU and global average, according to a survey compiled by research firm Markit Economics on behalf of the accounting giant.
Employment expectations are at their highest in the sector since October 2007, it says. Although input costs are predicted to rise, the rate of inflation at service providers is expected to be one of the weakest in Europe. Capital expenditure is expected to decline again over the coming year.
David Kennedy, head of advisory services at KPMG, said confidence in the Irish economic recovery was partly founded on the completed transfer of the largest property loans from the banks to the National Asset Management Agency (Nama), which had “provided some increased liquidity to support targeted bank lending” to businesses.
The Government’s announcement of a €500 million fund to support innovation has also been well-received, Mr Kennedy said. “Signs that tax receipts are now stabilising, albeit at levels below 2008, helps remove uncertainty and has driven a cautious improvement in consumer sentiment.”
However, improving service sector optimism has in part been prompted by the brighter outlook for the global economy.
