Majority of firms believe promissory note deal will boost activity
BUSINESS activity improved in the first three months of the year as the deal on the promissory notes boosted confidence, according to a new study.
The KBC Bank Ireland Chartered Accountants Ireland Business Sentiment Survey found that while companies remain cautious in their hiring, there are signs of greater confidence for the economy as a whole.
Austin Hughes, KBC Bank chief economist, said the survey showed a gradual recovery was taking hold.
"This appears to have spread to companies focused on domestic spending while export firms are continuing to report moderate growth," Mr Hughes said.
"What seems to be happening is a gradual easing in the negative forces that have depressed activity in recent years.
"Although the headwinds restraining recovery are easing, there are few signs that stronger supportive tailwinds that would generate a dramatic improvement in business conditions are taking hold."
Key findings from the survey include:
• Business activity posts solid growth in the first three months of the year.
• Majority of companies see the promissory note deal helping business, with improved sentiment and reduced austerity the key drivers.
• Home-grown companies report better conditions, signalling the boost in confidence and an improvement in the domestic economy.
• Stronger improvement expected to take place in the second quarter but hiring plans remain cautious.
• Firms regard currency movements as critical to outlook.
Austin Slattery, Chartered Accountants Ireland president, said the majority of companies believe the debt deal will have a positive impact on their business in the coming years.
"Most feel this will occur through a general improvement in sentiment but 30pc think that the easing in austerity that the deal will allow will be helpful to them while 12pc think they will benefit through lower borrowing costs," Mr Slattery said.
The survey was carried out between March 12 and 19 and the results presented are based on 333 completed responses.