Three quarters of companies ‘very optimistic’

ALMOST three quarters of Irish companies are “very optimistic” regarding their business performance over the next three years, according to a new survey.

However, companies located in the Republic have been harder hit by the recession than their counterparts north of the border.

The latest quarterly business monitor from Intertrade Ireland – the cross-border business development agency – shows that 58% of companies surveyed across the island of Ireland reported a drop in turnover during the second quarter of this year.

Statistics for the second quarter of the year show that just under 50% of all companies surveyed have lowered their financial targets for this year and 58% have reduced staff costs. As much as 60% of respondents in the Republic have reduced their prices, compared to just 22% in the North.

As much as 72% of Republic-based respondents reported a drop in turnover for the second quarter, with “only” 44% in Northern Ireland reporting the same outcome. Manufacturing, construction and hospitality were the worst hit.

“A marked differential between business performance North and South remains. In the South, 65% of companies have remained profitable during the downturn, while the figure for the North is 82%. There is no doubt that the depth and strength of the recession is more marked in the Republic than in Northern Ireland,” said Intertrade Ireland’s director of strategy, Aidan Gough.

Nearly half of companies surveyed said their customer base had declined during the quarter in question, adding that cash flow and reduced demand are their biggest issues. However, 70% of those surveyed said that they were successful in getting loans/credit from their bank; 10% more than said so at the time of the previous edition of the survey, earlier this year.

“Businesses are not yet seeing any signs of a recovery – but they are still positive, with almost three-quarters optimistic about their performance over the next three years,” added Mr Gough.

The main conclusion from the latest business monitor is that Irish companies are now operating at the bottom of a steep economic downturn.