Business ‘reacts well to budget’

BUSINESSES have reacted well to the Budget, a survey has found.

Despite the thumbs up for the budget, businesses warn conditions remain tough and will continue into 2010.

Though welcoming the budget they do not expect it to have any material impact on business in 2010.

Employment is still falling but the drop is easing with some optimism emerging that the bottom may have been reached.

It has emerged also that two thirds of those surveyed have introduced pay cuts but most say shedding jobs has proven the most effective way of dealing with the fall in business they have been experiencing.

The Winter Business Sentiment survey, published by KBC Bank Ireland and Chartered Accountants Ireland suggests that the economy may be starting a gradual upturn even if activity and employment levels continue to be very weak.

Commenting on the results, Tom Fitzpatrick, President, Chartered Accountants Ireland, said Irish businesses are reporting conditions that remain quite tough but that “are altogether better than they were 12 months ago”.

Despite that change in perception few firms are expecting there will be “a dramatic recovery in the early months of 2010”, he said.

In effect the survey highlights a mixed picture of the economy with a gradual turnaround beginning to emerge though conditions vary widely from sectors to sector.

“It seems clear that an improvement in global conditions has translated into more encouraging signs although domestic spending remains under pressure.”

Chief economist Austin Hughes at KBC Bank said weaker activity has prompted a further fall in employment. “It remains the case that job losses were widespread but the scale of those cuts has eased slightly.”


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