A large majority of medium sized Irish firms have a positive outlook for the economy over the next year despite ongoing international conflicts and the potential turmoil brought about by the US election in November, a new report by Grant Thornton has found.
According to the company’s International Business Report, which surveyed the attitudes of approximately 10,000 mid-market businesses across 28 economies, 73% of Irish businesses have a positive economic outlook compared to the eurozone average of 59%.
Irish businesses were also found to have high confidence in their own future performance, with 57% predicting that they will increase their revenues in the coming 12 months, 59% predicting an increase in profits and 52% predicting an increase to their headcount.
The report found that a minority of Irish businesses, 17%, believe that geopolitical disruption is going to be a constraint on their ability to grow. This compares to the eurozone average of 42% and the global average of 49%.
Despite the positive economic outlook, firms remain concerned about high energy costs with 43% identifying utility bills as their main constraint on growth. However, this is down from the peak of 69% during the first half of 2022.
Irish businesses also lag behind other countries in terms of innovation. Just 24% of those surveyed said they would increase research and development compared to 48% of companies in the eurozone and 60% globally.
There was a similar gap in the levels of planned technology investment, with 48% of Irish companies budgeting for an increase in the coming year compared to 58% of European and 67% of global medium sized firms.
Grant Thornton head of deal advisory Patrick Dillon said despite ongoing international tensions, Irish businesses are “remarkably positive” in their outlook for the future having already navigated a pandemic, cost-of-living crisis and disruption to the global supply chain in recent years.
“It will be important, however, not to rest on our laurels by overlooking the opportunity to invest in innovation in order to gain a competitive advantage in a global marketplace,” he said.
