More than two-thirds of chief executives in Ireland expect the economy to avoid recession in the year ahead, with 68 per cent predicting one will be swerved despite concerns over soaring inflation and supply chain difficulties.
This confidence, which is not replicated among their counterparts in many other parts of the world, emerged in the KPMG Irish CEO Outlook, a survey conducted between mid-July and late August.
The finding compares to 86 per cent of global business executives who do expect a recession, defined as two consecutive quarters of economic contraction, in their markets.
Some 40 per cent of chief executives in Ireland expect to see a range of uncertainties, including the fallout from Russia’s invasion of Ukraine and challenges finding staff, to have an impact on the economy in the short term. But the majority of those surveyed predicted growth of 2.5-10 per cent over the next three years.
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If a recession was to occur, 80 per cent of Irish chief executives say it would cause further disruption to their business and make it difficult to rebound from the pandemic. This is broadly in line with global sentiment.
What can be done to ease the pressure on the restaurant industry?
All over the country, restaurants are being forced to close their doors, unable to function in the current economic climate. Fears are growing that closures within the industry could reach one per day, levels last seen during the recession in 2012. With energy costs continuing to rise and Covid-era supports due to end early next year, the worst may be yet to come. In today’s episode, chef and restaurateur JP McMahon tells Ciaran Hancock about his decision to close his Galway-based restaurant Tartare in August this year. We also hear from Adrian Cummins, chief executive of the Restaurants Association of Ireland, who believes the government could be doing a lot more to ease the pressure on the industry.
“The global economy is currently facing significant headwinds and many businesses are having to adapt quickly to manage the impact of this,” KPMG managing partner Seamus Hand said.
“While Ireland is not immune to these challenges, it is clear from the results in our report that Irish CEOs believe that the economy is resilient and remains in a strong position relative to other markets thus enabling it to weather this storm.”
The most immediate business concerns for Irish chief executives are rising interest rates, inflation and continued supply chain interruption, the study found. The top threat over the next three years was identified as supply chain risk, followed by risk in relation to emerging and disruptive technology, reputation and tax changes.
Hybrid working has proven to have had a positive impact on productivity in the workplace, according to 64 per cent of chief executives in Ireland. This was significantly in advance of the 44 per cent who said so globally.
“The future of work is constantly evolving. However, we see a clear pattern where the office remains central to ensuring people feel connected, for learning and development and for building working relationships. This is complemented by the flexibility hybrid working affords employees,” Mr Hand said.
Three-quarters of chief executives in Ireland continue to invest heavily in their digital capabilities and said they have aggressive digital transformation strategies intended to secure first mover or “fast-follower” status. However, recessionary concerns for some mean more than a third have slowed the implementation of their digital transformation strategy.
