Government ‘better with troika’

The vast majority of Irish businesses thought the Government was doing a better job of managing the economy under the direct supervision of the troika, according to a survey.

Only 14% of companies think that the Government is doing a better job of handling the national coffers following the departure of the troika six months ago, according to a survey carried out by the software firm, Sage.

Sage’s survey showed that 51% of respondents felt the Government was not doing a better job of economic oversight, with a further 35% responding that they “don’t know”.

Asked whether Ireland exiting the bailout had increased business confidence, 45% of companies responded “yes”, 28% responded “no” and 27% responded “don’t know,” Sage said.

Even though fiscal consolidation over the past six years has taken 20% out of GDP, the country’s competitiveness has improved considerably over that period, particularly unit labour costs, which had grown out of kilter with peer economies.

However, the survey found that as the economy recovers, there are increased demands for pay rises, with 35% of companies saying they increased rates of pay last year. Looking forward, 36% of companies said they were feeling increased pressure from staff to raise wages and 27% expect to increase pay rates in 2014, said Sage.

“As business optimism improves since Ireland exited the bailout process, it’s no surprise that companies are seeing increasing pressure for pay-rises from employees,” said Avril McArdle, head of marketing, Sage Ireland.

“It looks like one of the main challenges facing business owners for the rest of this year will be the need to balance staff motivation and retention against ensuring cost competitiveness and profitability.”

Sage’s latest survey showed that awareness of the single euro payments area process had increased considerably. Some 92% of companies said their business was now compliant with the payments change compared with just 22% back in December 2013. The deadline for Irish companies to complete their migration to single euro payments area was March 31.