Survey shows most firms expecting improvement in New Year

Most Irish firms expect a slight improvement in their activities heading into the New Year, according to a new survey on business sentiment.

However the study by KBC Bank and Chartered Accountants Ireland highlights widening gaps between export-related business and domestic sectors.

While export firms are reporting a slight growth, companies selling to Irish consumers or in construction expect a further weakening of sales in January.

Austin Hughes, Chief Economist at KBC Bank, said conditions vary widely from sector to sector.

"About a third of companies are well into recovery at the moment," Mr Hughes said.

"Exports are doing well, manufacturing is doing quite well, food companies are doing ok… But what we see is another third of companies that are seeing their business environment actually get worse as we start into 2011.

"And their business is focused on construction or on Irish consumers."

The survey also indicated that the majority of Irish businesses think the EU/IMF rescue plan has improved the country's economic outlook.

However the research also reveals that 16% of firms think the bailout worsens our prospects.

"The encouraging point is that 61% of businesses actually think that IMF/EU assistance will help economic prospects," Mr Hughes said.

"So there is broadly-based support that this will actually help the Irish economy, and that's an encouraging finding."