Index shows slower growth for Irish businesses

A report published today shows that Irish firms are reporting slightly slower growth in activity levels in the past three months.

The KBC Bank/Chartered Accountants Ireland business sentiment index says that Irish businesses continue to post solid gains in business volumes in recent months.

The index has edged lower to 116.6 from 118 in the previous quarter.

The report says that a majority of firms are reporting increased business volumes but, compared to the previous quarter, there is a small reduction in the proportion of companies reporting higher activity and a similarly small rise in the number reporting lower output levels.

It is most pronounced among construction firms and the report says it "hints at some easing in the pace of growth in building activity in recent quarters and the possibility that some firms in this area may already be experiencing capacity strains".

They expect the slightly softer pace of growth to persist in the final months of 2017.

    Main points from KBC Bank Ireland / Chartered Accountants Ireland Business Sentiment Survey Autumn 2017:

  • Companies report slight easing in pace of growth in past three months.
  • Hiring remains strong as confidence in economic outlook improves.
  • Vast majority of firms don’t see ‘overheating’ in their operating environment at present.
  • Pay increase of 2% the norm for 2018; very few firms seeing no rise or increases above 5%.
  • Expected Brexit impact varies widely but predominantly negative and slightly greater than first envisaged; adverse impact expected by one in two firms, positive impact by one in six.
  • Roughly half of Irish companies not focussed on Brexit at present, implying a risk of some unpleasant surprises.

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