Almost 60% of companies have reported an increase in business activity in the past three months, with positivity among firms reaching an eight-year high.
“The recovery seems to be broadening across sectors and firms and a further improvement is expected in the final three months of the year,” said Austin Hughes, chief economist at KBC Bank Ireland, discussing its latest quarterly business sentiment index, published in conjunction with Chartered Accountants Ireland.
The index covers the three months to the end of September and shows a reading of 124.8 points. This is up from 121.8 in the second quarter and is the highest reading since the survey began in the final quarter of 2006.
Only 9% of respondent firms indicated that their business levels had weakened in the past quarter.
Companies were also broadly positive regarding Budget 2015, which most view as having a modest positive impact on employment and a bolstering effect on inward foreign direct investment. As much as 13% of companies intend to increase their hiring levels over the course of the next 12 months as a direct result.
Pat Costello, chief executive of Chartered Accountants Ireland, said: “While significant numbers of respondents were unsure about what is a complex issue, roughly half of those surveyed thought measures announced in Budget 2015 would enhance the outlook for foreign direct investment in Ireland.”
There was also a range of views as to what the most important economic factor in safeguarding future business prospects will be.
“Some 29% of firms cited the health of exports markets as the key factor, with cost trends signalled by 18% of those surveyed and access to credit by 15%. Some 9% of companies felt Budget 2015 would be the key determinant of their prospects in the year ahead,” Mr Hughes said.
The survey authors said the improvement in the index over the past few months is consistent with a range of evidence suggesting the economy is on a positive trajectory at present. While employment growth at respondent firms is growing modestly, 35% have boosted hiring in the past quarter.
“The autumn results are very encouraging in that they show a broadly-based pick-up in activity as well as greater business confidence in relation to the outlook for the broader Irish economy,” said Mr Costello.
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