Lack of credit hits 85% of bosses

A MASSIVE 85% of Irish chief executives surveyed believe finance is less easily available now compared to a year ago, while a third expect to cut jobs this year.

On the positive side, however, a third of Irish chief executives expect employment growth this year, while the majority of multinational corporation chiefs are confident about their groups’ investment in Ireland. The retention of the 12.5% corporate tax rate and cost competitiveness were identified as critical.

Almost three-quarters of multinational corporation chiefs said that they will either increase (33%) or maintain (39%) their investment in Ireland, according to PricewaterhouseCooper’s 2011 Irish CEO pulse survey.

Nearly three-quarters of survey respondents plan to hold pay at similar levels to last year, with only a quarter planning a pay increase.

The survey also found that less than a fifth of chief executives are favourable about the outlook for Ireland’s economy in 2011, compared to nearly a third last year.

This is due to the overall state of the economy, weak consumer demand and a lack of available finance. The majority (88%) do not expect Ireland’s economy to return to growth until 2012 or later.

Enterprise, Jobs and Innovation Minister Richard Bruton said the survey confirms that confidence in the Irish economy is still a major problem, among both indigenous and multinational chief executives, which he said is a concern.

“However, encouragingly, it also shows that an increasing number of CEOs are planning for growth and, crucially, that three-quarters of CEOs believe that innovation is critical,” he said. “I believe that the three key challenges for me and my department in attempting to improve the environment for business are reducing costs, improving access to finance and encouraging innovation.

“We have already made a start at addressing these issues through the Jobs Initiative. However, many challenges remain, and I am working hard with my department to develop plans to ensure that the issues identified by business are addressed so that confidence and growth can return to Ireland.”

Chief executives expect to see growth in revenues (54%) and growth in profits (49%) in the next 12 months and expect that this growth will be achieved through new product development and exploration of new market opportunities.

PwC senior partner Ronan Murphy said: “By accepting the reality of the economic environment and by restructuring their cost base and operating structures accordingly, Irish businesses have demonstrated their resilience.

“Those businesses which are further advanced in their response are now beginning to focus on planning for, and achieving, growth.”

The survey was conducted in March among 182 chief executives.


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