A slim majority of business leaders here believe the financial performance of their main organisation will improve next year, according to a survey by the Institute of Directors.

Its fourth quarter 2022 Director Sentiment Monitor found that 54% of directors were optimistic about an improvement next year.

However that compares to 77% of business leaders who were confident of an improvement at the same time last year.

The survey also found that just 15% of directors were more optimistic about the Irish economy than they were three months before.

More than 40% said they were more pessimistic.

Geopolitical tensions and economic instability was the most common concern for directors - with a quarter of respondents citing that as the biggest single risk facing their organisation.

Inflation was the biggest risk cited by 15% of respondents, while the sourcing and retention of labour was the biggest problem facing 13% of directors.

Meanwhile directors were broadly upbeat about the Government's performance to date, with 58% saying it had had a positive impact on consumer confidence.

In terms of their own business decision making, 49% said Government policy had had a positive impact, though 42% said it had no effect.

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Caroline Spillane, chief executive of the Institute of Directors (IoD) in Ireland, said that while business leaders were more hopeful last year for the year ahead than currently, signs of confidence remain.

"Just over one-in-two business leaders are hopeful that the financial performance of their primary organisation will improve in 2023, so there is still room for optimism," she said.

"Business continuity plans were the saving grace of many businesses when Covid-19 hit. As we remain in unpredictable times, I would recommend that all business leaders review and assess their business continuity plans to ensure they are future proofed," she added.