Business sentiment at an eight-year high – KBC/Chartered Accountants Ireland index

Business sentiment in the first quarter of 2015 rose to an eight-year high in the latest survey from KBC Bank Ireland/ Chartered Accountants Ireland on the back of increases in activity and employment.

The business sentiment index had a reading of 127.7 in Q1 2015, up from 124.3 in the final quarter of 2014. 

The latest KBC Bank Ireland / Chartered Accountants Ireland Business Sentiment Survey is based on responses from 354 accountants working in senior positions in leading companies.

According to the survey, Irish business conditions have continued to improve in early 2015. While the pace of output growth eased marginally in the past three months, employment growth picked up with firms seeing further increases in activity in the next three months. Companies also grew more confident about the outlook for the broader Irish economy. 

 “The survey shows a very encouraging further improvement in Irish business conditions in early 2015 that suggests another very positive year of growth in activity and employment,” said Chartered Accountants Ireland chief executive, Pat Costello. 

“The business sentiment index emphasises that momentum is building steadily and spreading across sectors but it also cautions against exaggerating the scale of the upturn. Nearly two thirds of companies point to rising business volumes, a strong result, but about a quarter report steady activity and one in ten see ongoing declines in output. So, while the survey points towards a very solid upturn, it’s not suggesting the boom is back.”

“There is a strong sense that uncertainties are easing but companies also note a diverse range of concerns,” said KBC Bank Ireland chief economist Austin Hughes. “So, businesses are not simply being carried forward on favourable ‘tailwinds’ that would traditionally mark the upswing in an economic cycle. 

“For some, the key issue remains disappointing demand, for others more intense competition of late and other companies are grappling with an increased regulatory burden and a range of different priorities. So, the ‘new normal’ is one in which Irish companies must continue to adapt and improve to remain viable.”  

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Grainne Rothery