By Eamon Quinn
Irish firms are grappling with staff shortages and are recruiting from abroad and retraining employees to avoid large pay hikes, according to a major survey.
The survey by KBC Bank and Chartered Accountants Ireland, which measures business sentiment, showed that the over 300 firms canvassed were focusing on pay and data protection, as much as Brexit.
And shortages were beginning to bite — with 38% of the firms saying they had hired from overseas to ease recruitment problems.
The survey’s headline business sentiment slipped, “which implies that the pace of improvement in business conditions has moderated of late” but was still consistent with a growth of 5% in GDP this year.
That chimes with other surveys such as the Irish Manufacturing Purchasing Managers’ survey which showed that manufacturing was still expanding but at a less hectic pace.
Separately, surveys showed weak business morale in Germany, France, and Italy — the eurozone’s three biggest economies - deteriorated in April as a stronger currency and capacity constraints limited output, signalling growth in the currency bloc has reached its peak.
Surveys suggest that growth has steadily slowed since January on euro strength and fears of a trade war between China and the US. German business confidence fell for a fifth consecutive month in April to reach the lowest level in more than a year, the Ifo institute said, suggesting that Europe’s biggest economy is losing some steam.
“High spirits among German businesses have evaporated,” Ifo chief Clemens Fuest said.
“The German economy is slowing down,” he said. Separate data from France’s national statistics body showed industrial morale in the eurozone’s second-biggest economy dropped in April.
“There’s definitely a slowdown, and the euro is not helping,” said Ion-Marc Valahu, fund manager at Geneva-based firm Clairinvest.
“The European Central Bank is stuck in a corner. If they look to normalise rates, the euro will just shoot up and they’re finding it hard to successfully talk down the euro,” he said.
Additional reporting Reuters