Optimism on the rise in Irish Business

BDO’s ‘Optimism Index’ has been tracking business sentiment on a quarterly basis since 2011 and has found Irish businesses to be more optimistic at the end of the first quarter this year than they were at the same 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.

“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,” said BDO managing partner Michael Costello. “Businesses need to focus more on areas such as Brexit, as it’s evident from this survey that they need to do more to prepare.”

The survey also found that 65 per cent of Irish businesses have not reviewed their supply chain to gauge the impact of Brexit. In addition, only 24 per cent of Irish businesses believe they are more prepared for Brexit than their suppliers and customers.

“Brexit will hit Ireland’s unprepared supply chains hard,” said Costello. “Although thereis no clarity as to what the full costs of Brexit will be going forward, the one certainty is that once Britain leaves the EU there will be a requirement for exporters and importers to make declarations and pay customs’ duties. This will involve costs for customs’ compli- ance and additional costs associated with delays at borders.

“Examining the supply chain is vital to reducing the potential negative impact of Brexit on businesses and alleviating costs associated. It is the first move a business should make when examining the potential Brexit impact and the first step to attaining a Brexit competitive advantage. We would strongly urge all Irish businesses to take practical steps to examine their supply chain as soon as possible” 

The survey also found that businesses believed 38 per cent of suppliers were pre-pared for the impact of Brexit on business, with only 24 per cent citing themselves as Brexit-ready, and 8 per cent saying they do not believe they are prepared at all.

The report also highlighted the strong finish to 2017 for businesses, with 51 per cent of the 350 companies surveyed recording increases in current activity. Thirty per cent said their activity levels had stayed the same and 18 per cent recorded a decline.

Other findings from the survey how employment levels have remained relatively stable: 74 per cent of businesses said the employment levels were the same as the last quarter; 18 per cent indicated an increase in employment levels; and just 7 per cent of businesses reported their employment levels were down.