Confidence gain may be temporary

Exiting the bailout has given businesses a boost in confidence, but the Association of Chartered Certified Accountants has warned it might be temporary.

In major markets, Ireland was outstripped only by the United Arab Emirates in terms of confidence, according to the Global Economic Conditions Survey carried out by the Association of Chartered Certified Accountants and Institute of Management Accountants.

The survey found 40% of respondents across Ireland reported confidence gains — a rise of 28% on the previous quarter’s findings.

Head of ACCA Ireland Liz Hughes said the rise in confidence was a clear sign the country is recovering.

“It may not come as a huge surprise that recovery in Ireland and confidence indexes are up quarter-on-quarter and year-on-year for 2013,” she said.

The assessment of the GECS is that the recovery in confidence is a temporary blip that will be corrected. The report said that, other than a modest rise in government spending, all other metrics hinted at a fall in the business environment.

“These substantial improvements in business sentiment are likely to prove temporary, as they do not correspond to changes in any economic fundamentals other than government spending,” said the report.