Irish enterprise leaders predict lift in two years
Majority expects recovery to happen by 2012
Published 01/08/2010 | 05:00
"The end is in sight -- but how long is the tunnel?" asks Mark Fielding of small business owners group ISME.
A massive majority of Irish business leaders -- 84 per cent -- told the Sunday Independent that the Irish economy will start to pick up by the end of 2012 at the latest.
Many expect a lift to kick in sooner, with 33 per cent predicting it would start to happen by the end of 2011. More, 45 per cent, think that recovery will take off by the end of 2012.
A small number -- 6 per cent -- of business owners surveyed expect things to start to lift by the end of this year.
However, the ISME chief is not so hopeful. "Even 2012 is probably a little bit on the optimistic side," says Fielding. "The recession is almost over for the multinationals, but for SMEs it drags on. GNP is what matters, not GDP."
The all-important GNP figure, which excludes profits made by multinational companies based here and is the bellwether of how the domestic economy is doing, will fall by 1 per cent this year, the Central Bank predicted on Friday. On a positive note, that's a revision of its earlier 1.5 per cent drop forecast.
Profits are flatlining for 38 per cent of businesses, Irish company owners said. Close to one-third (30 per cent) of them saw profits fall, and 22 per cent have experienced losses this year to date. Just 10 per cent of businesses are seeing profits increase.
Although the Central Bank says unemployment will continue to the end of 2011, 66 per cent of business owners told us they would not cut jobs this year. In last year's survey, most were letting staff go.
In past recessions, small business recovery has lagged behind international firms by six to nine months, but, Fielding says, "now we're seeing possibly double that. How fast they recover depends on how fast the global economy recovers. Irish business owners are renowned for their optimism, but we need to be careful, recovery will depend a lot on questions over the US and Chinese economies".
There was some unnerving talk of false recovery dawns in Britain by the Governor of the Bank of England last week and in the US, where economic growth figures have disappointed.
The US Federal reserve reported that the US economy grew only modestly in June and July, raising fears that its recovery was petering out. Fed chief Ben Bernanke said the outlook remained "unusually uncertain".
The Irish economy will grow by between 2.2 per cent and 2.8 per cent in 2011, the Central Bank predicts.