By Daniel hunter
Business confidence in Ireland has fallen in the second quarter of 2013 as access to capital dried up, according to new findings from the Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA).
For Q2 2013, the results showed that 35 per cent of the finance professionals surveyed in Irish businesses reported a loss in confidence in their organisation's prospects, 11 percentage points higher than in the first quarter of 2013.
Perceptions of the wider economic recovery deteriorated sharply as well, with 70 per cent pessimistic (up from 52 per cent in Q1) about the future. Nevertheless, respondents believe that Ireland's experience of austerity may be slowly drawing to a close - expectations of government spending may be negative, but they have risen consistently over the last eighteen months.
"Across the globe the survey shows the highest level of optimism about the national and global economies in two years, and the strongest year-on-year improvement in three years," Liz Hughes, Head of ACCA Ireland said.
"Not so in Ireland. However, excessive optimism in the first quarter may be partly to blame for the sudden drop in confidence, as the confidence and optimism indicators are still up year-on-year.
"The finance professionals in the engine rooms of Ireland's businesses are telling us that there has been a tightening in the supply of growth capital after an 18-month positive trend in access to capital. Then there's the matter of where businesses would put such capital to work: our findings suggest that there are fewer business opportunities out there for Ireland's businesses compared to early 2013.
"In fact, investment in both capital assets and people continued to fall as businesses failed to reinvest. We expect that finance teams will be sitting down with business leaders to work out a strategy to reignite the recovery both in individual organisations and the wider Irish economy."
GECS is the largest quarterly economic survey of accountants in the world, gauging the views of ACCA and IMA finance professionals working at the coal face of businesses.
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