Majority of business leaders don't expect return to growth until 2012
Published 30/05/2011 | 05:00
THE vast majority of Irish chief executives do not expect the economy to return to growth this year, according to a new survey of chief executives by Pricewaterhouse Coopers.
Some 88pc of Irish businesspeople do not expect Ireland's economy to return to growth until 2012 or later, according to the survey. That chimes with forecasts from the OECD, which does not see the economy expanding this year; and Ernst & Young, which sees the economy contracting by 2.3pc this year. Official forecasts, made earlier this year, predict modest growth.
"Confidence in the Irish economy is still a problem, among both indigenous and multinational CEOs, which is clearly a concern," Enterprise Minister Richard Bruton said at the launch of the report yesterday.
Just 16pc of respondents say they have a favourable outlook for Ireland's economy in 2011 compared to 29pc last year. The main reasons for the increasing gloom in the business sector are weak consumer demand and a lack of available finance, the survey said. More than half of respondents said the global economy would have the greatest effect on Ireland's recovery.
Despite the worries, more than half of Irish business leaders are planning for growth. Chief executives expect to see growth in revenues and growth in profits in the next 12 months.
They expect that this growth will be achieved through new product development and through exploration of new market opportunities. Almost three-quarters of chief executives working for foreign companies in Ireland are confident of their parent groups' plan to increase investment in Ireland although the retention of the 12.5pc corporate tax rate and competitiveness were identified as critical factors.
"By accepting the reality of the economic environment and by restructuring their cost base and operating structures accordingly, Irish businesses have demonstrated their resilience," said PwC partner Ronan Murphy.
"Those businesses which are further advanced in their response are now beginning to focus on planning for, and achieving, growth."
The survey shows 85pc of respondents feel finance is less easily available now compared to a year ago; 60pc say controlling costs is the biggest priority in the year ahead; and just 23pc are planning pay rises.
Other priorities include launching new products (45pc); developing/motivating key talent (31pc); business restructuring (28pc) and entering new markets (26pc).