Ireland named one of the world’s most ‘optimistic economies’

By Business & Finance
05 February 2015
optimism report

Irish businesses are the most optimistic in Europe about prospects for growth in 2015, and tied with New Zealand, Ireland is the joint second most optimistic economy globally according to a survey conducted by business advisory group Grant Thornton.

The research, launched today, shows that Irish businesses remain positive about prospects for profits and employment but recommends that due consideration be given to the measured cautiousness of other economies that haven’t suffered such financial lows.

Grant Thornton’s International Business Report (IBR) 2015 shows that 82% of Irish businesses are optimistic for growth in 2015 ahead of Australia (70%), the UK (68%) and the US (59%).  India (92%) was the most optimistic economy globally. The research has found that the outlook for 2015 is Ireland’s highest level of business optimism since 2007 and well above the global average of 35%.  Finland (-56%), France (-36%), Argentina (-28%), Japan (-12%) and Italy (-2%) are the five least optimistic countries globally the report found.

Commenting on the survey Patrick Burke, partner at Grant Thornton offered a view of cautious optimism: “The survey shows that Irish businesses continue to remain optimistic and companies look set to grow employment and profits in 2015. This optimism, however, must be viewed in the context of the low point, the financial crisis, from which business in Ireland have come. In many ways, 2014 was the first year since the financial crisis where Irish businesses felt they were really back on track. The measures adopted by businesses in Ireland to cope with the downturn helped them to evolve into leaner operations, the fruits of which are now ripening.”

Ireland also ranked highly across a number of other indicators in the survey:

  • Employment:  60% of businesses in Ireland expect employment to increase, with 30% expecting no change. This gives Ireland the 2nd most positive employment outlook globally.
  • Profitability: 68% of Irish businesses expect profits to grow in 2015, this is up from 58% in 2014 meaning Ireland has the 3rd most optimistic outlook on profitability globally.

These positive indicators were partially offset by a year on year decline in expectations for increased revenue at 70% (down 12%) and exports at 28% (down 6%). These markers, however, remain encouraging.

In terms of challenges, the research found that an increasing number of Irish businesses see lending as an issue facing the growth of their companies. 36% of those surveyed cited access to short-term finance as a potential constraint for growth in 2015, up from 30% in 2013.

Patrick Burke continued:“The recent uncertainty in Greece in contrast to the strong performance of the UK and Ireland in this survey suggests that countries that have taken a more robust stance on fiscal discipline and economic recovery are better placed to grow their economies this year.”