Business sentiment down but employment growth rises

Business sentiment declined slightly in the second quarter as output growth eased and there were concerns over economic and political developments in Greece, China and Britain, according to a new survey.

The KBC Bank Ireland/ Chartered Accountants Ireland business sentiment index fell to 123.1 in the period April to June, compared with an eight-year high of 127.7 for the first three months of 2015. The lack of confidence was particularly marked in externally focused sectors such as manufacturing, and was attributed to wider concerns such as a possible "Brexit".

These fears did not stop companies recruiting, however, with employment growth by Irish firms reaching its strongest since the survey began nearly nine years ago. Some 42 per cent of companies reported increased employment levels in the past three months. Just 9 per cent of firms reported a drop in headcount.

All but one industry sector surveyed reported a stronger positive jobs balance than three months earlier, with food companies recording an unchanged but comparatively large positive net hiring position.

In related news, the latest Morgan McKinley monthly employment monitor has recorded a 31 per cent rise in opportunities for professionals, compared to the first six months of 2014. The report shows there were 19 per cent more jobs available in June compared to the same month a year earlier.

Meanwhile, the number of people putting money aside for a rainy day declined last month, with those aged under 50 stating that now was a bad time to save.

The latest Nationwide UK (Ireland)/ESRI Savings Index – which measures overall sentiment towards saving – fell from 123 index points in May to 116 in June. The latest rating is, however, still the second highest in more than a year.

While older people expressed concern about the amount of money they were putting away, the latest index shows that younger respondents do not feel that now is a good time to save. According to the survey, the percentage of respondents over the age of 50 who believe they are saving less than they hoped increased to 26 per cent, from 19 per cent in May. At the same time, 30 per cent of under 50s said now was a bad time to put money aside, compared to just 18 per cent a month earlier.

Separately, a Visa Europe study shows consumer spending rising 5.6 per cent year-on-year in June.