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Budget ‘kite flying’ fuelling negativity for Irish businesses – IBEC

The quarterly Business Sentiment Survey shows uncertainty at the Budget – and the future of the Eurozone – is taking its toll.

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THE EMPLOYERS’ GROUP IBEC says the confidence of Irish businesses is continuing to suffer as a result of ‘kite-flying’ about the contents of Budget 2013, as well as unease about overseas opportunities.

The group’s quarterly Business Sentiment Survey, published this morning, sees it warn that speculation in the media about the inclusion of various measures in the Budget – including forcing employers to cover the first few weeks of an employee’s sick pay, or increasing PRSI – is “damaging confidence”.

“The survey demonstrates the need for government to take decisive action to support growth and job creation in the upcoming budget,” said IBEC’s chief economist Fergal O’Brien.

“To get on top of our national debt and tackle the unemployment  crisis we need growth right across the economy, not just in the export sectors,” he said.

“The private sector is the engine of the economy and it is vital that the government does not undermine its ability to drive growth and create jobs.”

The report also finds that the continued unease about the future of the eurozone, which is dampening economic growth elsewhere in the continent, is also contributing to the worries of Irish producers – particularly those in the export sector who are reliant on stronger European demand.

The survey’s index of sentiment for the coming three months shows a recording of -19, down from -14 in the previous quarter. Negative figures indicate expectations of falling demand.

The index of export expectations, which stands at +12 now, had been at +20 three months ago and as high as +31 a year ago.

Expectations of short-term domestic sales are broadly flat, with the reading at -3 – marking four successive months in which the figure has been negative.

In full: IBEC’s Business Sentiment Survey (PDF) >

More: IBEC demands ‘pro-jobs Budget’ as forecast for 2013 is lowered

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Gavan Reilly

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