BDO Optimism Index Q2 2017
16 June 2017
BDO is delighted to introduce the BDO Optimism Index figures for the second quarter of 2017. The index, a continuous survey carried out for the last six years, tracks business performance and the views of business leaders across Ireland.
Four out of five companies say the Government is not providing them with enough information to adequately prepare for Brexit. The survey reflects the volatility of markets and the different views of Brexit by both London and Brussels, and how that has led to a growing frustration amongst Irish businesses. There is clearly an information gap and uncertainty. The sooner these are addressed, by the lead negotiators, the better. It is an evolving situation, but businesses are calling for clarity.
Optimism is down marginally from this point last year, slipping from 66.7 in 2016 to 65.9 in 2017, but has still achieved a +15% improvement over the last 4 years. Mid to large companies and businesses in the services sector are the most optimistic at 68.6 and 68.8 respectively.
Business activity slipped slightly back from 47% to 42% compared to this quarter last year but remains in very positive territory overall. There are some signs of caution with 80% of companies saying they expect their employment levels to remain static this year. Further, there was a 4% drop in the number of companies expecting higher operational profits, from 36% to 32% in the same quarter last year.
With regard to pricing levels, a majority of companies (72%) surveyed indicate prices will remain static compared to the same quarter last year.
Interestingly, 46% of businesses are projecting higher levels of activity compared to the same period last year. While on the surface this is a positive position, it does represent a 7% drop from previous findings in 2016 of 53%.
Business sentiment is overall in a very healthy state albeit with a few cautionary warnings highlighted from businesses surveyed.