Most Irish firms experienced a growth in business in the past three months, and expect stronger activity in the months ahead, however this confidence contrasts with nervousness about the broader economy, according to a new survey.
The IIB Bank/Chartered Accountants Business Sentiment survey for Autumn 2007 found that while only 4% of firms outside construction and property expect a substantial impact from a housing slowdown, ten times as many fear a hit from poor sentiment.
Over recent months there has been an avalanche of bad news about the economy, with most of it prompted by the slowing property market.
However, the survey, which was conducted on 450 companies, found that one in two companies have experienced stronger levels of activity in the past three months, despite suggestions there would be a sharp economic slowdown.
One third expect to increase employment and only 14% expect to cut jobs, the survey found.
But when the companies were asked about the general economy they were far more pessimistic, and for many Irish companies the main worry is the attitude of others to the economy instead of what they are experiencing themselves.
The survey found that 42% of firms felt the main threat from weaker housing was through a downturn in business and consumer confidence.
Ronan O'Brien of the ICAI said that business don't anticipate a sharp weakening in demand for the goods and services they produce - with only one in six saying this was a threat - rather the main concern relates to an ability to compete.
'Rising costs, particularly labour costs, are the primary worry but firms also recognise a number of other factors influencing their ability to compete on markets at home and abroad. These range from dealing with ever increasing domestic competition through coping with skill shortages and handling the particular problems posed by rising interest rates', he said.
And as the euro has hit a new high against the dollar again today the survey highlighted the declining US currency as a significant concern for manufacturing companies.
