Business confidence at highest level in two years

BUSINESS confidence is at its highest level in almost two years, a survey has found.

However, while just over 43% of surveyed businesses believe the new Programme for Government will result in an increase in confidence and encourage recovery, more than 60% said the Government must do more to lower business costs.

Securing credit is still an issue for almost a quarter of all those surveyed.

Cork Chamber’s Economic Trends Survey began in 2009, when just over 51% of members expressed confidence in the future.

However, the results of the latest survey for the first quarter of 2011 shows that over three quarters of respondents are now confident about the financial future of their business.

A total of 77% said they are confident about the future, up from 74% in the last quarter of 2010. It is the highest level since the Chamber’s first economic survey two years ago. Almost one third of members expect to increase staff numbers in the next year.

Cork Chamber President Ger O’Mahoney said the results suggest the trading environment is improving.

“A total of 78% of businesses are now confident about the financial future of their business — this has steadily increased from Cork Chamber’s first economic survey two years ago when the figure was just 51.5%,” he said.

“It is also extremely encouraging to find that over a third of members (35%) expect to increase employee numbers in the next 12 months, while 45% of companies surveyed reported increased turnover in recent months.”

The survey also sought members’ attitudes towards the Government and its policies. Over 43% said the measures set out in the Programme for Government will result in an increase in confidence and encourage recovery.

But a fifth of respondents said the programme will not be enough to encourage recovery.

Mr O’Mahoney said the forthcoming jobs initiative must make it easier for businesses to recruit and retain staff.

“43.52% of members do not believe that the Government will take the steps necessary to reduce unemployment,” he said.

“65.42% said they do not have confidence in the Government taking the steps required to lower business costs.”

The survey also looked at the availability of credit and found that one in four members still say their business is being curtailed by bank lending. This figure has, however, fallen from 35% in the fourth quarter of 2010 to 25%.

Fewer than 20% of respondents agreed with the Credit Review Office’s contention that Bank of Ireland and AIB were open for business towards SMEs, with 44% disagreeing.

“Support for an annual property tax is more finely balanced — support is now at 33.64% in this survey, down from 46.24%. 51.40% disagree with a property tax up from 45.16% in the last survey,” Mr O’Mahoney said.