ONLY 5 per cent of the Republic's business leaders expect their company's turnover to decrease over the next 12 months, while 75 per cent predict an increase, a new survey shows. Almost 40 per cent say they will hire more workers, while 60 per cent expect to increase their exports.
The business confidence index, researched by Irish Marketing Surveys for Bank of Ireland in association with The Irish Times, tracks the opinions of 185 chief executives of the top foreign and domestic companies based in the Republic.
The survey was carried out in May, and although it reflects a continuing confidence in the economy, there are indications that a certain amount of caution may be emerging.
While exactly three quarters of chief executives believe their turn-over will rise in the next year, the tally is down slightly from the February index figure of 77 per cent, which in turn had dropped slightly from the previous November's 79 per cent.
Another question, on their expectations of Irish economic growth, showed 58 per cent of managers predicting an increase, compared with 65 per cent in the February survey. But with the economy already growing at a record pace, growth was around 7 per cent last year - even sustaining this level of performance would be no mean achievement.
Responses to this question also reveal a sharp difference between Irish- owned companies, 69 per cent of which answered "increase", and foreign- owned firms, with only 47 per cent expecting a rise.
Asked to consider the employment prospects of a graduate, compared with a year ago, an overwhelming 91 per cent of respondents said they believed he or she would be better off; just 2 per cent aid the opposite.
Many expect to employ more workers themselves. Some 38 per cent of companies expect to hire more employees in the year to come, compared with 43 per cent in February. But 48 per-cent say their labour force will remain static, against 39 per cent at the last survey.
On company exports, there has been an increase in confidence. Some 60 per cent of managers believe their company's exports will increase in the coming 12 months compared to 57 per cent in the previous index.
Commenting on the results, Mr Jim Power, chief economist with Bank of Ireland, said he attributed the slight decline in overall confidence to greater uncertainty about the single currency and increased volatility in the pound-sterling exchange rate.
The interest rate outlook has become less certain following the increase seen in early May, and many businesses are now starting to question the commonly held view earlier in the year that Irish interest rates would decline steadily in the run-in to EMU," he added.
Mr Power expressed some surprise at the buoyant outlook for exports, given the recent warnings from the export bodies about the strength of the pound against the other ERM currencies, suggesting that the optimism was driven partly by the competitive exchange rate against sterling.
