Ac­coun­tant sur­vey re­veals op­ti­mism over credit ac­cess

The Irish Times - - Business Today - CARO­LINE MADDEN

MOST IR­ISH com­pa­nies be­lieve the es­tab­lish­ment of the Na­tional As­set Man­age­ment Agency (Nama) will have a pos­i­tive – al­beit mod­est – im­pact on credit avail­abil­ity, new re­search has found.

The Spring 2010 KBC Bank/Char­tered Ac­coun­tants Ire­land Busi­ness Sen­ti­ment Sur­vey also found that one in five busi­nesses ex­pe­ri­enced a de­te­ri­o­ra­tion in credit avail­abil­ity in the first quar­ter of 2010.

Fur­ther­more, two-thirds of busi­nesses in­ter­viewed have re­duced pay lev­els in re­cent years, with an av­er­age pay cut of 13 per cent im­posed on staff.

On a pos­i­tive note, the vast ma­jor­ity of busi­nesses do not in­tend to cut pay lev­els fur­ther this year. Al­though sig­nif­i­cantly more firms re­duced rather than grew their work­force dur­ing the first three months of 2010, the pace of job loss ap­pears to have eased.

The sur­vey, which re­ceived 353 re­sponses from char­tered ac­coun­tants hold­ing se­nior po­si­tions in Ire­land’s lead­ing com­pa­nies, iden­ti­fied a num­ber of fac­tors that point to­wards a sta­bil­i­sa­tion in busi­ness ac­tiv­ity.

More than one-quar­ter of re­spon­dents re­ported an in­crease in busi­ness vol­umes in the first quar­ter. This is the strong­est read­ing in two years, and im­plies an “eas­ing in pres­sures” fac­ing com­pa­nies, KBC chief econ­o­mist Austin Hughes said.

In ad­di­tion, 36 per cent of firms an­tic­i­pate stronger ac­tiv­ity lev­els over the com­ing quar­ter, com­pared to 25 per cent which en­vis­age a weak­en­ing.

“The spring 2010 sur­vey seems to con­firm that the worst is over for the Ir­ish econ­omy, even if there are few signs of any dra­matic im­prove­ment,” Mr Hughes said. Some sec­tors ap­pear to be re­cov­er­ing more quickly than oth­ers, how­ever.

For ex­am­ple, man­u­fac­tur­ing busi­nesses and firms op­er­at­ing in the busi­ness-to-busi­ness sec­tor have re­ported stronger-than-av­er­age re­sults. Un­sur­pris­ingly, construction and con­sumer-fo­cused firms re­ported the weak­est ac­tiv­ity lev­els.

The key driv­ers of im­proved busi­ness ac­tiv­ity lev­els ap­pear to be com­ing from out­side the do­mes­tic econ­omy, Mr Hughes said, which ex­plains the im­prove­ment in the man­u­fac­tur­ing sec­tor.

“In con­trast, weak­ness in ar­eas such as construction and con­sumer spending looks set to be a drag on Ir­ish eco­nomic per­for­mance for some time to come.”

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.