Jobs figures still a concern amid feelgood factor
Confidence among Irish business owners has soared, with bulging order books and signs the economy is turning a corner all feeding the positive sentiment, according to a survey by business group IBEC.
Companies are also expecting to hire more staff, boosting hopes that the country's high unemployment rate of 13.2pc will continue to decline. The rate in October was at its lowest level in over three years.
But as Ireland prepares to leave its bailout programme, the International Monetary Fund (IMF) said last week that unemployment posed the biggest challenge for the Irish economy. About 60pc of the people out of work have been without a job for over a year. Many of them may find it difficult to find employment again as the economy recovers.
IBEC said that its business sentiment index soared in the third quarter to its highest level since readings began in 2009 and that the result was also the first time the index was in positive territory.
The report, published this morning, noted that the managers' confidence in the Irish business environment had been weaker at the beginning of the year – but that sentiment was now extremely positive.
And Irish businesses are also upbeat about their own outlook and that of the economy as a whole.
"This has been driven by expectations of increased sales, a growing customer base and higher profitability," according to IBEC, which added that companies don't appear to be overly concerned about the impact of October's Budget.
Nearly 400,000 homeowners with tracker mortgages received good news last week when the European Central Bank cut its base interest rate to just 0.25pc – the lowest level ever. The savings from the rate cut will effectively mean that the average homeowner on a tracker mortgage will recoup the property tax they'll pay for 2014.
While the IBEC survey also reveals that Irish businesses still expect to keep hiring, the expectations of just how many people they will take on is slightly weaker than it was in the first half of the year.
Telecoms firms, electronics manufacturers, retailers and medical technology firms are the most likely to be hiring, according to the survey, while food and drink manufacturers are the least likely.
And after being battered for years by the downturn, Ireland's small- and medium-sized businesses are increasingly encouraged by sales potential.
Managers also expect order books to grow.
But despite the positive scene being set by businesses, the European Commission said last week that it expected Ireland's economic growth next year to be lower than previously anticipated.
It will expand at a rate of 1.7pc, still higher than the 1.1pc eurozone average, however.
Another report out yesterday, from InterTradeIreland, also shows that there are signs of a broadening recovery across the island of Ireland.
It said that 26pc of businesses across the island are now in 'growth mode', with 28pc in the Republic reporting they're expanding compared with 21pc in Northern Ireland.
"Over the last few quarters, we have seen signs of economic improvement with more firms moving into stabilisation," said InterTradeIreland strategy and policy director Aidan Gough. "This quarter we observe a broadening recovery with more businesses moving from stabilisation to a position of growth."