Uncertainty forces confidence levels to drop

Confidence levels among Cork companies dipped in the first quarter of the year; with overall economic uncertainty and disappointment in the banks playing major roles.

That said, however, latest findings from Cork Chamber of Commerce show that overall business confidence levels in the county remain high — with 78% of respondents to the chamber’s first-quarter economic trends survey saying they are confident in their financial future.

That percentage is down from a confidence reading of 84%, taken at the end of the final quarter of 2011; but that particular reading represented a record high in the near three-year history of the survey.

Furthermore, the 78% reading for the beginning of 2012 is the second highest confidence reading since 2009.

“Reduced confidence is reflected in that 22% now expect profits to decline — double the 11% recorded in the last survey. However, over one third of companies report increased turnover in the previous 12 months and 45% expect profits to rise this year.

“Recent investment announcements confirm the region’s strengths and we hope this is reflected in future surveys,” said Cork Chamber chief executive, Conor Healy.

Reaction to bank helpfulness also threw up mixed signals — 42% of respondents saying their bank was supporting their business adequately; 18% saying their bank was not supportive and a significant 40% giving no feeling either way.

Significantly, just under 60% of the 100+ firms surveyed, had not applied for finance during the quarter, but of the numbers that did, more than half were successful in getting loans from their banks.

Only 3% said they were completely unsuccessful in getting sought-for loans approved, while 21% said they were partially successful.

Mr Healy added that recently announced Government programmes aimed at easing SME credit must now be fast-tracked.

“Renewals/restructuring of an existing overdraft were dealt with most quickly, with new loan applications taking the longest for a decision. Collateral was the biggest concern of members, when applying for finance.

“The recently announced Temporary Partial Credit Guarantee and Development Capital Scheme are a welcome step in ensuring credit supply for SMEs, but these must begin operation without delay,” he said.


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