Rising market volatility sees just under half of Irish businesses optimistic for 2023

Data shows just 56% of Irish businesses expect to increased revenue in 2023

Despite this significant drop, Irish businesses are still more optimistic about the economic outlook than the rest of the EU at 43%.

Irish businesses are increasingly concerned about the country's economic outlook, with just 56% of firms optimistic for the next twelve months.

The dip in optimism is matched by a downward business trend, data from Grant Thornton has revealed, with just over half of Irish businesses expecting a revenue increase in 2023.

This year's outlook also represents a significant drop year-on-year, with over 85% of Irish businesses reporting positive economic forecasts in 2022.

However, despite this significant drop, Irish businesses are still more optimistic about the economic outlook than the rest of the EU at 43%.

The report also finds that just 58% of businesses are expecting to increase investment in talent for the coming twelve months, which has declined from 63% in the first half of 2022.

Commenting on the findings, Grant Thornton Ireland Managing Partner Michael McAteer said that despite the end of Covid restrictions, the latest data shows the impact of the war in Ukraine, rising energy costs and market volatility on business sentiment.

"This extended period of uncertainty has caused optimism levels to dip significantly. Despite the overall downward trend, some solace may be found in that Irish businesses retain a level of optimism that is ahead of the average number in the EU at 43%.” 

The cost of doing business was also reported as a growing concern for Irish companies, with Ireland among the top three countries globally worried about energy costs at 69%. Labour costs are also a major concern as cited by 58% of businesses, up from 27% just two years ago.

Grant Thornton Chief Economist Andrew Webb said, "as the war in Ukraine continues, fuel prices will remain top of mind for many companies while others are also facing challenges in meeting costs around talent attraction and retention."

In addition to rising costs, Irish businesses also fear the ongoing economic situation's impact on international trade. This period last year, 37% of Irish businesses expected to increase their exports, however, just 26% feel the same this time around. 

Just 18% expect to see an increase in the number of countries they sell to in the coming 12 months, while only 24% expect to increase revenue from non-domestic markets.