BDO Optimism Index Q1 2018
05 April 2018
BDO is delighted to introduce the BDO Optimism Index figures for the first quarter of 2018. The index, a continuous survey carried out for the last seven years, tracks business performance and the views of business leaders across Ireland.
This quarter we note that 65% of Irish businesses surveyed have not reviewed their supply chain to identify current business relationships that might be negatively impacted by Brexit.
The index found that businesses believed that 38% of suppliers were prepared for the impact of Brexit, with only 24% citing themselves as Brexit-ready, and 8% saying they do not believe they are prepared at all. These results illustrate the high level of uncertainty Irish firms have about the impact of Brexit on their business and the practical steps that they should be taking to review with supply chain.
Examining the supply chain is vital to reducing the potential negative impact of Brexit on a businesses and alleviating costs associated. It is the first move a business should make when examining the potential impact and the first step to attaining a Brexit competitive advantage.
Businesses need to ensure they are adequately prepared for the many changes that will inevitably take place over the coming months and years. There are many ways businesses can be pro-active in ensuring that they are informed, prepared and ready for the transitions that will take place. We advise businesses to take the practical steps to prepare for Brexit as the deadline draws closer.
The report highlights there was a strong finish to 2017 with 51% of businesses recording increases in current business activity. 30% of businesses advise their activity levels had stayed the same and 18% reported lower levels.
The survey reports operational profit levels are in line with last year at 23%. However projected business activity continues to be muted and is noticeably weaker at -5% than it was for 2014, 2015 and 2016.
Other findings from the survey show that employment levels have remained relatively stable with 74% of businesses reporting the same levels as the last quarter. 18% indicate they have seen an increase in employment levels and just 7% of businesses reported that their employment levels are down.
Optimism is up from this point last year, rising from 66.7 in 2016 to 67.9 in 2017. Medium and large sized businesses are the most optimistic at 67.73 and 73.83 respectively. Overall the survey found that companies remain optimistic.