Irish companies are increasingly optimistic about their prospects, a new survey has found, but economic uncertainty remains a concern.
The Azets barometer rated Irish businesses as the second most optimistic of the six Northern European countries it surveyed, with companies in the construction and manufacturing sectors the most optimistic.
Irish companies on average rated their economic prospects at 6.5 out of 10, up from the 6.1 recorded in June.
Construction and manufacturing rate their prospects at 7.1, amid continued strong demand for homebuilding and infrastructure development, while the finance sector came in third at 6.7 out of 10.
Those businesses employing 250 people or more tended to be more positive, rating their prospects at 7, while microbusinesses with under nine staff were the least positive at 5.6 out of 10.
But the survey, which was compiled by the professional services firm Azets Ireland and questioned 136 firms across Ireland, pinpointed a number of concerns.
While many businesses expect to increase revenue, profit and staff numbers, economic uncertainty is the top concern, followed by talent recruitment and retention, which has been affected by a tighter labour market. Geopolitical uncertainty and competition also ranked highly among company concerns.
Costs continue to be elevated too, with almost half of businesses increasing wages as a result, and 43 per cent passing the extra costs on to their customers via raised prices.
That was more pronounced in the manufacturing sector where 80 per cent have increased wages as a result of inflationary pressures and 70 per cent said they have increased prices. In the hospitality and retail sector, that stood at 54 per cent.
“It’s clear from our findings that firms are largely optimistic about the Irish economy and their future growth potential. This reflects the continued strong performance and prospects for Irish businesses relative to their peers in the Nordics and UK. With soaring levels of homebuilding in Ireland and recovering levels of global demand, it is not unsurprising to see the high degree of confidence specifically among firms in the construction and manufacturing sectors,” said Neil Hughes, chief executive of Azets Ireland
“However, the growth trajectory for many firms is not without its challenges. Given rising geopolitical instability and high business costs, economic uncertainty remains a top concern for many businesses. Firms should continue to expect the unexpected over the coming months. From phased debt repayments to the introduction of auto-enrolment, the cost of doing business continues to rise for many firms and effective planning will be needed to thrive and grow into the future.”
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