Blow for exporters as confidence drops
18 December 2017
Gavin McLoughlin of the Irish Independent writes on the findings of BDO's Optimism Index.
The proportion of exporters reporting increased business activity fell the most for four years in the third quarter.
Just over 40pc said activity was up - compared to 55pc at the same time last year.
That's according to BDO's latest quarterly optimism index, which monitors business sentiment among Irish companies.
BDO Ireland managing director Michael Costello said there had been a drop in sentiment for exporters and so-called "micro businesses".
"It is possibly explained by the continuing uncertainty over Brexit. Ireland is one of the most open trading economies in the world, so exporter sentiment is an indicator of our economic health," he said.
Micro businesses endured a record sentiment decline, according to the index. Business activity and operational profits plummeted to a four-year low.
In a further indication of a slump in the sector, the number of micro businesses who reduced their workforce outnumbered those hiring more staff. Large businesses were most optimistic in the survey of 400 companies.
"While sentiment across the broader business economy is still quite strong, it is concerning to see that micro businesses do not share this sentiment," Mr Costello said.
"At first glance, it appears business growth is moving in the right direction and figures for this quarter against the same period last year remain strong. However, when you drill down into the statistics it shows that medium and larger businesses are pulling away from micro businesses."
Mr Costello said the divergence could be down to differences in access to funding, increased exposure to personal financial issues, and the effects of the Brexit vote.