Survey shows slide in business sentiment
Business confidence has weakened sharply amid fears over the extent of cuts coming in December's budget, according to a new survey of business sentiment.
Irish companies have become increasingly worried and fearful when it comes to the econonimc outlook, according to the survey carried out by KBC Bank
However the survey also showed that business levels are stabilising with some small improvement expected in the final quarter of the year.
Chief Economist at KBC Bank Austin Hughes sad the key risk is that businesses start to postpone spending and hiring in response to uncertainty about the broader economic climate.
"As many as five out of six companies feel heightened macro concerns will translate into poorer conditions for their business," Mr Hughes said.
The sense is that the world has changed markedly of late, said Mr Hughes, noting that some 45% of companies say that pressures on Ireland’s budgetary position are likely to affect them a lot.
The economist said the scale of the problems facing the Irish economy meant there was considerable uncertainty as to how these should be tackled.
"Opinion is divided as to how large the upcoming budget adjustment should be," he said.
"While the majority of businesses feel more aggressive action is called for in Budget 2011, a sizeable 31% feel cuts greater than €3bn shouldn’t be attempted."
The same uncertainty meant there was no agreement as to whether there should be an early election, the survey indicated. Roughly 27% of companies think an early election would be helpful but a slightly higher number - 30% - think it would be harmful.
"In many ways, these results emphasise how nervous and uncertain Irish business is at present," he said.
The KBC Bank / Chartered Accountants Ireland Business Sentiment Survey was conducted in late September and polled around 400 chartered accountants working in senior positions (CEO’s, MD’s and FD’s) in Ireland’s leading companies.
