A combination of stronger activity levels and increasing optimism about the Irish economy meant Irish business sentiment reached a new nine-year high in the final quarter of 2015, according to a business survey conducted by KBC Bank Ireland and Chartered Accountants Ireland.
The KBC Bank Ireland/Chartered Accountants Ireland Business Sentiment Survey reflects the view of chartered accountants working in senior positions (CEOs, MDs and FDs) in Ireland’s leading companies.
The survey suggested the economic recovery is continuing to spread further across the various sectors of the Irish economy, but the pace of economy-wide growth appears to be stabilising rather than continuing to build.
Activity levels across firms operating in the Irish economy continued to increase towards the end of 2015. However, the pace of growth was only fractionally ahead of the previous quarter.
Two-thirds of companies signalled increased business volumes and less than 6% indicated weaker activity, the survey suggested.
The most notable development through recent quarters is the increased positivity of businesses focused on the domestic economy.
Austin Hughes, chief economist, KBC Bank Ireland, said: “Irish based companies report continuing increases in activity levels and employment at the turn of the year. With similar gains expected in early 2016, business sentiment has risen to a new nine-year high.
Significantly, companies are reporting increases in their business volumes in 2015 that broadly tally with current estimates suggesting Irish GDP grew by close to 7%. So, the sentiment survey suggests that from corporate Ireland’s perspective, recovery is now both strong and broadly based.”
Commenting on the results, Chartered Accountants Ireland chief executive Pat Costello said: “A further uptick in Irish business costs in this survey could reflect difficulties some companies might have in sharply scaling up their activity levels. It may also reflect a correction after a very sharp fall in costs through the downturn as well as possibly owing something to the impact of currency movements on import costs. It is important not to be alarmist about this development and businesses surveyed are confident about their future growth. However, in a world of very low inflation, a rising trend in Irish costs needs to be monitored closely.”