Business sentiment index shows some improvement

Irish business activity strengthened in the three months from April to June, according to the latest KBC Bank Ireland/ Chartered Accountants business sentiment study.

The survey shows that business hiring has increased with the number of layoffs also notably lower in the second quarter of the year.

Companies surveyed said they see markets growing somewhat faster than 12 months ago, and are less concerned about making further cost reductions.

KBC said the results of the survey contrast with recent official GDP data from the CSO.

But the bank’s economist Austin Hughes said the survey looks at the economy in a different way to the CSO as it compares conditions across all sectors rather than trying to ”arrive at a summary numerical estimate of activity”.

”Consequently, it presents a different and arguably more broadly representative picture of recent trends in Ireland,” the economist added.

Mr Hughes said the survey points to signs of an ”upturn” across a wider number of sectors and companies with an increase in the number of firms signalling higher business volumes and a drop in the share of firms indicating lower business volumes.

”Importantly, these modestly positive trends are expected to continue in the next three months,” the economist added.

Today’s survey also showed – surprisingly – that 26% of firms found that outward migration was starting to make it harder to fill vacancies. ”The survey isn’t suggesting such problems are widespread but it does imply that the Irish jobs market is turning and the ”push” factor driving emigration may be waning,” Mr Hughes said.

Pat Costello, the chief executive of Chartered Accountants Ireland, said the most encouraging aspect of the survey was the improvement in the employment element.

”It seems many companies may be playing ”catch-up” as they have been very cautious in their hiring in the past year or so, altering headcount only in response to clearly established needs rather than forward looking plans,” he added. Source: RTE