Irish Economy on the Rebound

Business activity in Ireland has improved to its strongest reading since late 2015, the KBC Bank Ireland/Chartered Accountants Ireland has found.

Business sentiment index rose to 118 in the summer quarter, from 110.6 three months earlier, The Irish Independent wrote on Wednesday.

The pick-up was driven by stronger business activity levels of late and a further easing in concerns about the outlook for the Irish economy.

The latest increase marks the fourth consecutive quarterly gain, meaning the index has recovered to levels seen before the UK Brexit vote.

“Improvement seen in business sentiment in summer 2017 is really encouraging in that the details of the survey suggest the recovery is now reaching a notably wider range of companies and that earlier fears of a speedy and substantial hit to activity from Brexit have not materialized,” Austin Hughes, chief economist, KBC Bank Ireland, said.

However sentiment remains notably softer than the recent series peak of 131.1 recorded in late 2015.

While fears have eased, continuing uncertainty means companies remain cautious.

The details of the summer survey, particularly in relation to job creation, suggest that companies are responding to still elevated levels of uncertainty by adopting a relatively cautious approach to expansion plans.

  Brexit Jitters

Of the businesses questioned 77% said they now feel they have a strong or some sense of what Brexit may mean for them, with over half of these taking action.

“This is positive in that it suggests Irish business has been proactive in assessing and implementing a response to Brexit rather than being lulled into complacency,” Barry Dempsey, CEO, Chartered Accountants Ireland, said.