Irish business beyond the recession

  • Irish employment will be back at pre-crisis levels by 2016 - IBEC
  • Many domestic firms planning to become exporters, launching new services and products

In advance of its flagship CEO Conference today (Wednesday, 23 November 2011) IBEC in association with PwC today published a new report which found that employment levels will be back at pre-crisis levels by 2016, as exports continue to grow and domestic firms start exporting new services and products. Despite the fact that the research was conducted in October during a time of great uncertainty right across the eurozone it shows that the majority of firms remain positive on their business outlook and plan to increase investment and employment next year.

The report 'Irish business beyond the recession' shows:

  • Irish firms will grow their turnover by an average of 5% in 2012, while employment levels will increase by 2%
  • Just over one third of firms plan to increase employment in 2012 and by 2016 60% of firms plan to have a larger workforce
  • Export sales will grow by 44% over the coming five years while firms expect to see domestic sales rise by 22%, regaining all of the losses of recent years. Many firms operating in the domestic market plan to break into export markets in the coming years
  • Irish firms are currently operating at 75% capacity which is relatively low in both historic and international terms. This bodes well for Ireland's potential economic growth rate
  • Irish companies plan to invest almost €6 billion on plant and machinery in 2012, a 10% increase on the 2011 spend
  • Almost 70% of firms will invest in IT projects next year and about 50% will invest in plant and machinery

Launching the report ahead of today's 'Going for Growth' in the Convention Centre, Dublin, IBEC Director General Danny McCoy said: "Despite the ongoing global economic uncertainty, Irish firms are planning for a bright future. Companies continue to have ambitious employment and investment plans for next year and the period out to 2016. Exporters are investing heavily again in their business as they have limited spare capacity due to their strong sales performance of the past two years.

"Many firms operating in the domestic market continue to have spare capacity, but this is a positive signal for Ireland's economic recovery as these businesses retain the plant and equipment and expertise to grow over the coming years. Many of these companies are now looking overseas to grow and expand. By 2016, the domestic sector will have regained all of the output lost during the downturn."

PwC Senior Partner Ronan Murphy said: "Based on the survey and our experience with clients, Irish businesses have undertaken significant adjustments to their business models mainly in the areas of cost reduction and process re-engineering in order to ensure the sustainability of their operations for the future. As a result, Ireland has become more competitive on many fronts and this is particularly important as we strive to hold and grow our international investment. With our competitive tax regime and highly skilled workforce, the fundamentals of Ireland’s economy have remained intact.

"The survey also indicates that investment capacity exists and this, together with the necessary finance being available, will ensure that Ireland’s position as a competitive ‘gateway’ for international business will be strengthened. While Ireland’s business climate will continue to be challenging for some time, our recovery will mainly be export led and our challenge will be to ensure that we continue to attract foreign direct investment and provide the necessary certainty for these investors."

ENDS

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