Renewed credit crunch 'hits Ireland's business confidence'
on 14/08/2013 12:19:36
The survey, from ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA), shows that for Q2 2013 35% of the finance professionals surveyed in Irish businesses reported a loss in confidence in their organisation's prospects.
That is 11% higher than in the first quarter of 2013.
Perceptions of the wider economic recovery deteriorated sharply as well, with 70% pessimistic (up from 52% in Q1) about the future.
Nevertheless, respondents believe that Ireland's experience of austerity may be slowly drawing to a close - expectations of government spending may be negative, but they have risen consistently over the last eighteen months.
Liz Hughes, Head of ACCA Ireland said: "Across the globe the survey shows the highest level of optimism about the national and global economies in two years, and the strongest year-on-year improvement in three years. Not so in Ireland.
"However, excessive optimism in the first quarter may be partly to blame for the sudden drop in confidence, as the confidence and optimism indicators are still up year-on-year."
She said that finance professionals are saying that there has been a tightening in the supply of growth capital after an 18-month positive trend in access to capital.
"Then there's the matter of where businesses would put such capital to work: our findings suggest that there are fewer business opportunities out there for Ireland's businesses compared to early 2013," she said.
"In fact, investment in both capital assets and people continued to fall as businesses failed to reinvest. We expect that finance teams will be sitting down with business leaders to work out a strategy to reignite the recovery both in individual organisations and the wider Irish economy."