Institute of Directors (IoD) survey shows Brexit still a major concern for Irish businesses
With the uncertain Brexit process taking yet more twists and turns this week but, for now, still on track for the March 2019 deadline, the directors of Irish businesses believe that Brexit is the single biggest risk factor facing their organisation, according to the latest Director Sentiment Monitor, a quarterly survey of director sentiment by the Institute of Directors in Ireland (IoD).
The survey finds that a clear majority of business leaders believe consumer confidence has been positively impacted by the current Government’s performance to date, but that business sentiment continued to fall in successive quarters throughout the year.
- Irish business sentiment has consistently declined through the year, with only 32% of business leaders remaining optimistic about the Irish economy in Q4, down from 35% in Q3, 46% in Q2 and 52% in Q1.
- 60% of business leaders believe that the financial performance of their primary organisation will improve in 2019, an increase of 14% when compared to Q3 (51%).
- The single biggest risk factor, cited by 32% of business leaders, facing their organisation is Brexit – compared to 26% in Q3.
- 89% of directors believe that Brexit will have a short-term negative impact, with 60% also believing the consequences will be negative in the long-term too.
- 70% of business leaders believe consumer confidence has been positively impacted by the current Government’s performance to date.
- The availability of talent remains of significant concern for business leaders.
Commenting, Maura Quinn, Chief Executive, the Institute of Directors in Ireland, said:
It should serve as a worrying indicator that business sentiment has fallen consistently throughout the year, with Brexit remaining the dominant risk we face into 2019. Also of key concern to our members and their organisations are sustainability and long term growth prospects, which when coupled with labour talent shortages, signals an uncertain end to the year.
Government Performance, Confidence and Supply, Election
43% of respondents believe there will be a General Election in 2019, but with a credible 29% believing there will be no General Election.
There was mixed feelings towards the Government’s performance with 70% of business leaders believing consumer confidence has been positively impacted by their performance to date.
And whilst 37% of directors believe the Government’s performance so far has had a positive effect on their business decision-making, over half (52%) believe it has had no effect.
Brexit, Business Growth, and Risk in 2019
Irish business sentiment has consistently declined through 2018, with 32% of business leaders remaining optimistic about the Irish economy in Q4, down from 35% in Q3, 46% in Q2 and 52% in Q1.
That said, 60% of business leaders believe that the financial performance of their primary organisation will improve in 2019, an increase of 14% when compared from Q3 (51%).
The single biggest risk factor that 32% of business leaders believe is facing their organisation is the ‘effects of Brexit’ compared to 26% in Q3. This is almost twice the number who equally believe it to be political/economic uncertainty or labour sourcing/quality/capability/retention (17%).
This is further borne out by 89% of directors believing that Brexit will have a short-term negative impact, with 60% believing the consequences will be negative in the long-term too.
72% of directors anticipate that opportunities for growth in 2019 in respect of their primary organisation will come from the domestic market (39% Q3), whilst 31% believe these will come from the EU (22% Q3), while 20% say the UK (5% Q3).
When asked about the main issues that “keep you awake at night”, a clear majority (42%) of directors cited sustainability and long-term growth prospects, followed closely by attracting strong talent (33%) and structural change/changing business models (30%).
On the issue of the availability of talent for their business, 62% believe it has decreased compared to 57% in Q3, with 31% indicating that the situation has stayed the same as the previous quarter (37% Q3).
Gender Pay Gap Reporting
With gender pay gap reporting likely to become a reality in the future, a clear majority of respondents (67%) agree with the principle of gender pay gap reporting and 53% say they have no concerns about gender pay gap reporting.
Interestingly, while 40% of directors say their organisation has taken action to discover whether gender pay bias exists in their business, nearly a third (30%) say they have not.
Interestingly, with GDPR having come into effect in May 2018, just six months later, only 1.23% of directors consider the impact of GDPR compliance to be the single biggest risk factor facing their organisations.