Irish businesses believe the economy is improving for the first time in two years, according to research published today by The Sage Group Plc.
The annual Sage Business Index surveys close to 14,000 SMEs in 18 countries around the world.
For the first time in four years businesses around the world are also more optimistic than pessimistic, with scores rising above 50 across all three areas surveyed: their own prospects; their national economies; and the global economy.
Irish businesses are more optimistic about their own prospects with confidence rising 2.92 points to 64.99 in 2014, the highest it has been in two years. But, perhaps more encouragingly, business confidence in the national economy has seen a large increase. For the first time, Irish businesses think the economy is improving, with confidence up 10.45 points to 58.67. Businesses also believe the global economy is improving, with confidence rising three points in the last twelve months to 51.68.
In Europe, countries are split over the prospects for the European economy. Businesses in Ireland and Spain are most confident scoring 56.40 and 54.14 respectively, while the UK, Germany and Poland are all more optimistic than pessimistic. However, in Austria, Switzerland and Portugal the reverse is true, with all countries scoring below 50. France is the most pessimistic about the European economy of all nations surveyed, scoring just 44.08.
The rise in confidence is reflected in businesses’ predictions for the year ahead. The majority (63%) anticipate their business turnover will grow in the next year by an average of 3.2%. Additionally, 48% expect the number of people employed by their company to increase by an average of 2.7 people, while just 8% expect the number to fall.
Brendan Flattery, CEO of Sage UK and Ireland, said: “It’s encouraging that confidence continues to build in Ireland’s economy and that small and medium sized businesses are optimistic about the prospects for their own operations and the economy. This is underlined by other positive economic indicators such as the recent Exchequer figures that showed increasing consumer confidence in the domestic economy and lower unemployment rates. However, more must be done to support businesses with ambitions to grow their exports – a key factor in the continued growth of the Irish economy and something that should be addressed in next week’s Budget.”