Most firms hiring rather than letting people go

Most Irish companies are now hiring new staff rather than letting people go, according to a new study.

The latest edition of the Irish business sentiment survey, jointly published by KBC Bank Ireland and Chartered Accountants Ireland, shows the first positive jobs balance since the end of 2007. It found companies are beginning to feel more confident about the economy.

The survey — which was conducted last month — represents the second successive quarter where more firms reported growth than declines in business volumes.

Chartered Accountants Ireland president, Austin Slattery said the improvement in business sentiment is gradually building and should continue over the coming three months.

“The details of the survey point towards a turnaround in Irish business conditions that should put this economy on a more solid growth footing as we turn into 2013. In view of the difficult global climate and an ongoing domestic adjustment, this should be seen as a very encouraging outturn.”

However, Austin Hughes, chief economist with KBC Bank, sounded a cautious note, saying the improvement has been modest, as significant numbers of companies are still reporting lay-offs.

“A very uncertain economic outlook also means companies seem likely to remain cautious in their hiring. That said, signs of even a tentative pick-up in employment hint at a potentially major change in Irish economic conditions,” according to Mr Hughes.

“The sort of turnaround we’re seeing is unusual and is highly influenced by the nature and intensity of the downturn in the Irish economy in recent years.

“A gradual easing in the negative pressures weighing on activity is a critically important development in restoring the Irish economy to growth.

“In this regard, tentative signs of a bottoming-out in conditions facing businesses focused on consumer spending and construction are particularly encouraging.”

While the survey points to a gradual, rather than notable pick-up in business activity, it noted a certain degree of positivity from firms in the construction and consumer sectors.

While suggesting that the sharp declines in activity in these areas may have come to an end, the survey said it may take another quarter or two of data to confirm this.