Owner Manager

Gloomy predictions from Irish purchasing managers

02.07.2009
There is little evidence of green shoots in the Irish economy for over half of the country’s purchasing managers who expect their budgets to fall further over the next six months, according to a new study.

The study, which was carried out by the Irish Institute of Purchasing & Materials Managers (IIPMM), showed that just 13pc of purchasing managers are forecasting an increase in their budgets over the next six months, with 53pc expecting a decrease in budgets.

“There are few indicators of an early recovery in these figures, but the encouraging signs are that the rate of decline in purchasing seems to be slowing and Irish companies are becoming more competitive,” said Jane O’Keeffe, President, IIPMM.

She said that while 53pc of purchasing managers reported a fall in orders in the first half of the year, a lower number (29pc) expected a decline in purchasing to continue in the second half of 2009, with some 22pc expecting the volume of purchasing to increase over the next six months.

The outlook appears to be a little more positive for 2010, according to the IIPMM study, with 34pc of purchasing managers expecting the level of purchasing to increase next year, although one in five (21pc) forecast a continuing decline.

One of the few benefits of the downturn seems to be that Irish industry is becoming more competitive, O’Keeffe added. Over three quarters of survey respondents (78pc) said that Irish suppliers have become more competitive over the last 12 months.

A majority of purchasing managers (63pc) do not anticipate a recovery in the global economy until the second half of 2010 at the earliest.

Respondents were even more gloomy on prospects for the Irish economy. Half (50.4pc) do not anticipate a recovery in the Irish economy until 2011 at the earliest, with over a quarter (27pc) not anticipating a recovery until the second half of 2011 or later.

In terms of Government reaction to the economic crisis, purchasing managers were “underwhelmed” with the impact of the supplementary budget, with 63pc saying they were less confident about business as a result of it.

However, they were firm in their view of the impact of a second Lisbon Treaty defeat, with 70pc saying it would lead to Irish job losses.

Some 178 organisations responded to the IIPMM survey, which was conducted in the last week of June. Respondents represented organisations purchasing over €14.4bn in goods and services and employing over 272,000 staff, with 43pc operating primarily in export markets and 57pc in the domestic market.