Survey shows business still confident about economy

 

Irish business leaders remain confident about the strength of the economy, but are slightly less optimistic than earlier this year, the latest quarterly Bank of Ireland business confidence survey shows.

The survey, taken in August and completed in September, by Irish Marketing Surveys with 175 chief executives or heads of finance from the largest companies in the Republic, shows 76 per cent of senior managers expect turnover increases in their business over the next year.

However, this is down by 4 per cent on the last quarterly survey and 2 per cent lower than figures recorded in February.

As a result there has been a small increase in the numbers who think their turnover will stay approximately the same.

However, the survey says it is notable that a large majority of those controlling Irish business show no sign of "being unnerved by the potential impact of the current international crisis on their own business".

In terms of expectations for economic growth, 56 per cent of respondents expect it to increase over the next year. Some 35 per cent expect growth to stabilise - a drop of 1 per cent - while 6 per cent said growth will decrease. On the question of inflation, 55 per cent of business leaders said the prices of goods and services will hold "relatively steady".

The number expecting price rises was recorded at 34 per cent, seven points higher than in May.

Despite this, the survey says the prospect of inflationary pressure "does not appear to have given rise to undue concern within Irish business".

There has been a 3 per cent drop in the numbers expecting to increase their number of employees. While 40 per cent said they will increase employment in the next year, some 47 per cent expect the numbers employed to stay the same. This is a 4 per cent increase on the last survey. The survey states that despite a "see-saw effect evident" in the figures the long-term trend has shown "widespread optimism for continuing improvements in employment prospects".

Most exporters continue to remain confident, with 64 per cent expecting an increase in overseas sales during the coming year.

According to the survey confidence about the effects of economic and monetary union (EMU) on the Republic's economy are increasing.

In this survey, 65 per cent said they think EMU will improve the Irish economic environment. This has increased from 52 per cent in February and 63 per cent in May.

The numbers predicting that EMU will damage the economy has increased from 9 per cent to 13 per cent.