Upbeat surveys on improving Irish economy

Monday 13 January 2014 16.39
SFA, Vision.net and Grant Thornton all more upbeat on Irish economy
SFA, Vision.net and Grant Thornton all more upbeat on Irish economy

Several sources have reported positive indicators on Irish business sentiment.

The Small Firms Associations has said the information it gathered for the final quarter of 2013 represented the strongest set of sentiment data in several years.

The results show that 35% of respondent companies rate the overall business environment to be either "‘very good" or "good", an 11% increase on the second quarter of  2013.  

The SFA said that 48% rate their own business as "very good" or "good", up 6% on the second quarter.   

But SFA Acting Director Avine McNally said the weak performance of the wider European economy remains a concern for SMEs here. 

She said that the biggest challenge for small firms, especially those trading on the domestic market, is the fragility of the domestic economy and confidence among consumers.  

"While there is an improvement in confidence among small businesses it remains fragile, this confidence needs to improve further as then owner managers are more likely to invest and make purchase decisions," Ms McNally said. 

Vision.net seeing signs of stabilisation

Meanwhile, Vison.net - which collates information on business failure - has noted a stabilisation in the rate of business wind-ups. 

It said there was an 11% reduction in the number of insolvencies in the retail and wholesale sector in 2013 compared to the previous year. 227 companies in the wholesale and retail sector were declared insolvent in 2012 compared to 202 in 2013.

Vision.net also said that the number of business start-ups in the retail and wholesale sector rose by 6.6% last year to 1,776 from 1,665 in 2012.

"Vision.net data for 2013 suggests that the spiral of business failures in the sector may be coming to an end and the conditions for growth in 2014 are beginning to emerge," commented Vision.net's managing director Christine Cullen.

But she also warned that the environment for the retail sector remains difficult, with the risk of collapse still high for many in the sector.

Grant Thornton says Irish firms are among most upbeat

And business advisory group Grant Thornton has found that Irish businesses are among the most bullish in Europe in terms of their expectations for the next year with 84% expecting to grow turnover this year compared with an EU average of 52%.

Grant Thornton said that Ireland also ranked highly across other indicators in the survey, including profitability, economic outlook and employment.

66% of Irish businesses expect their profits to grow this year, compared to an EU average of 45% and a global average of 53%, while 72% of companies here are optimistic about the economic outlook for the Irish economy compared with 36% in last year's survey. 

40% of Irish businesses expect to add to their workforces this year, with 58% expecting their employment levels to remain the same. This gives Ireland the second most positive employment outlook in Europe after the UK.

"The survey provides further strong evidence that there has been a significant shift in the level of confidence in Irish businesses in the past 12 months, " commented Grant Thornton's Patrick Burke

He said that companies look set to grow revenue, profits and employment in 2014 ahead of other European economies, "a testament that the difficult decisions companies have made to recalibrate their businesses are now bearing fruit".

Mr Burke said that the strong investor demand for Irish bonds last week is driven by market recognition that Ireland has distinguished itself from other European peripheral economies in how it has sought to respond to the challenges faced.

The Grant Thornton survey today noted that businesses in Spain, Italy and France were the most negative about the outlook for this year in Europe.