The majority of Irish CEOs are confident about prospects for the economy and for their businesses, but fewer than last year, according to PwC's annual CEO Pulse survey. Brexit is a big concern, but not the biggest. High personal taxation topped the list of challenges. Despite this, three quarters of CEOs surveyed are planning to grow revenue while two thirds expect to grow profits.
Feargal O'Rourke, Managing Partner with PwC, pointed out that the previous Pulse survey had been taken just before the Brexit vote, so there was a perceptible hit this year. "If you go back over the 12 years of this report, the nadir was 2009 when the favourable view was in single digits. There was a real jump from 2013 to 2014 when the positive view went from 30% to 82%. It peaked in 2015 and since then, there's been a decline with a noticeable decline in 2017," he said. "Brexit is weighing. If companies aren't doing something about Brexit, they have their heads in the sand," he warned.
However, exporters - who have been badly hit by the falling pound over the past year or so - are fairly confident, with more than a quarter looking at exports growth in excess of 20% in the year ahead. "The sterling impact has been baked in. It was quite sudden and sharp after the referendum result. Companies with low margins who are having to break away from the dependency on Britain are now looking to Europe. However, it's not all rosy in export land."
Mr O'Rourke said the sense of concern around the Trump administration and what it might introduce was diminishing, but he said there were signs of a more effective administration emerging. "In January, there was a real sense of progress but that has ebbed. However, tax is back on the agenda. He did a deal with the Democrats on the raising of the debt ceiling. He might use something similar to get tax reform over the line. On saying that, he has had no big win."
On personal taxation topping the list of concerns, Feargal O'Rourke said it always featured prominently in the survey. "The Government should focus on the squeezed middle, taking people out of the top tax rate. People would love to see a cut to the top rate. However, the economic and political arithmetic don't make that a feasible option," he concluded.
MORNING BRIEFS - Apple's share price fell last night as it unveiled its new iPhones, including its 10th anniversary version, the iPhone X. The weaker shares was not due to disappointment with the devices but appears to have been down to the fact that the first phones will not be shipped until November. Usually, Apple gets the first version out in late September. The share price went above $163 prior to the launch but fell back below $160 before recovering slightly.
*** Telecoms and entertainment group Eir has reported an increase in earnings for the full financial year to the end of June. Earnings before interest, tax and depreciation costs were 4% higher at €520m. That was on underlying revenue of €1.32 billion - up 1% - before foreign exchange impacts are accounted for. The group managed to reduce operating costs by 5% to €520m.
*** There was some positive news for exporters with a surge in sterling yesterday. The pound briefly went back under the 90 pence mark to the euro before settling slightly back above that level. It was all down to the rate of inflation across the UK which registered at almost 3% in the year to August. That will put pressure on the Bank of England to increase interest rates sooner than many expected. The price rises are not being matched by an increase in wages, however, which means consumers are effectively becoming poorer.