BDO is delighted to introduce the BDO Optimism Index figures for the first quarter of 2017. The index, a continuous survey carried out for the last six years, tracks business performance and the views of busiess leaders across Ireland.
Despite indications that the UK’s decision to leave the European Union will lead to a “hard” Brexit, the findings of this quarter’s research shows that only 4% of Irish companies have sought external advice and support.
It is clear that larger companies are the most pro-active on Brexit with 13% of respondents in that category indicating they had sought external advice.
Despite low levels of businesses taking on Brexit advice, 28% of the respondents say it will have a negative impact on their future hiring plans. Again, larger companies are more likely to forecast a dip in hiring with 32% reporting that Brexit may dent their future hiring plans.
Business activity levels for Irish companies in 2016 continued to achieve higher or similar results to the same quarter of the previous year – an interesting response considering the political turmoil arising from the change in government and Brexit.
However, 18% of companies forecast lower business activity levels in the first quarter of 2017 which is the highest level of respondents to do so since 2013. This was particularly pronounced among exporters, with 23% of that category forecasting a first quarter dip in activity levels. That’s the biggest dip in exporters’ confidence since 2012 when Europe was in the midst of a crisis over Greek debt.
Employment levels continue to record modest growth with Mid/Large companies displaying a strong shift towards maintaining current levels.
One in five companies are now charging higher prices, the highest recorded since the survey began. This steady increase is evident across all the respondents, however there was a slowdown in Mid/Large companies and Dublin-based companies who reported a 12% and 11% decrease respectively in prices.
Reflecting the increase in pricing, 42% of Irish businesses reported higher profit levels in the fourth quarter of 2016. Operational profit levels are still strongest amongst Mid/Large companies and Dublin-based companies.
Optimism levels now stand at 66.7 which a slight decline from the same quarter of the previous year, 66.9%. With the ongoing discussions around Brexit, Trump and a possible change in Government, it will be interesting to see how businesses looking to grow respond to these external influencers.
Please click below to download the BDO Optimism Index Q1 2017.