Confidence hit by lack of credit

The ongoing lack of access to credit dragged business confidence down, leading to an sharp decline in the number of people who are optimistic about Ireland’s recovery.

The Global Economic Conditions Survey from the Association of Chart-ered Certified Accountants (Acca) and the Institute of Management Accountants found that 35% of finance professionals surveyed in Irish businesses reported a loss in confidence.

Acca Ireland head Liz Hughes said finance was one of the driving forces of the Irish economy and if they are not confident, it is a strong indicator that business is in decline.

She said: “The finance professionals in the engine rooms of Ireland’s businesses are telling us that there has been a tightening in the supply of growth capital after an 18-month positive trend in access to capital.

“Then there’s the matter of where businesses would put such capital to work: Our findings suggest that there are fewer business opportunities out there for Ireland’s businesses compared to early 2013.”

There was a near-20% collapse in the number of people reporting confidence about the future.

However, respondents believe Ireland’s experience of austerity may be slowly drawing to a close — expectations of government spending may be negative, but they have risen consistently over the last 18 months.

Ms Hughes said Ireland’s pessimism was at odds with what the survey had uncovered around the world.

“Across the globe the survey shows the highest level of optimism about the national and global economies in two years, and the strongest year-on-year improvement in three years. Not so in Ireland.

“However, excessive optimism in the first quarter may be partly to blame for the sudden drop in confidence, as the confidence and optimism indicators are still up year-on-year,” she said.