Optimism recorded but manufacturing suffers : ISME

Irish businesses are more optimistic about their prospects than they have been since the beginning of 2002.

This increase of confidence is thought to have been fuelled by the higher levels of consumer confidence recorded over the last couple of months.

Just over a quarter of companies (26%) said that business and employment opportunities would improve compared to 13% and 11% surveyed in March and July respectively.

Many see the data as confirmation that the labour market is proving to be extremely resilient to the economic downturn.

However, while 45% of those surveyed by the Irish Small and Medium Enterprises Association (ISME) said turnover had increased, 33% reported that sales/order books were down for this time of year.

Concerns were expressed that manufacturing continued to lag behind with no net increase in turnover while Services (+28%) and Distributors (+18%) continued to gain.

According to Jim Curran, ISME's head of research: "It should be noted that 35% of Manufacturing companies confirmed that they have considered outsourcing part or all of their business to cheaper locations, including Eastern Europe".

Curran also warned Finance Minister Charlie McCreevy not to deflate the general levels of optimism now being felt by the business community.

"If he increases in taxes and tariff's he will increase the cost of doing business in Ireland, dampen economic and business activity and further erode confidence and competitiveness," Curran concluded.