BDO index finds business optimism lowest since 2015

OPTIMISM among Irish businesses for the remainder of the first quarter of this year has fallen to its lowest point since 2015, according to the BDO Quarterly Optimism Index.

Professional services firm BDO’s Quarterly Optimism Index monitors business sentiment across Ireland. It found that the first quarter’s optimism levels were down 16pc to 49.5pc.

Speaking on the results of the latest survey, Michael Costello, managing partner of BDO in Ireland, said: “The profound effect of a long-term lockdown on businesses in Ireland continues to heavily impact overall sentiment.

“The results of our latest Optimism Index indicate that current business activity is slipping, and reported operating profits are low. The result of which is an all-time low for optimism among the business community in Ireland.

“Unsurprisingly, lockdown is also having a hugely negative impact in relation to projections for the second quarter.

“On a positive note, state-funded supports continue to help businesses navigate the health crises — and have been crucial to maintaining employment levels.”

The survey found just under two-thirds of Irish companies (64pc) expect to report lower levels of business activity during the first quarter.

It also found that just over half of businesses reported lower operating profit levels in the fourth quarter of last year, compared to the same period in 2019.

On the subject of Brexit, the index found nearly half of businesses surveyed (46pc) maintain that it continues to impact them negatively due to new customs rules and the costs associated with them.

Employment levels are remaining stable despite the challenges. Most Irish businesses (68pc) are looking to maintain current employment levels . The proportion of businesses maintaining their headcount is broadly in line with levels last seen around 2012 to 2014.