A slight improvement in business sentiment has been captured in the latest European Economic Survey carried out on behalf of Eurochambres, of which Chambers Ireland is a member.
The outlook among businesses in Ireland for the year ahead has been described as one of “cautious optimism” with the majority of firms putting the emphasis on cost containment in the year ahead.
More than 43,000 business people and entrepreneurs throughout Europe took part in the survey which has been conducted on an annual basis for over three decades now.
The overall outlook pointed to a slight improvement in the business sentiment compared to the historic low of this time last year.
However, persistent challenges such as sourcing of energy and raw materials, labour costs and shortages in skilled workers undermined expectations and have contributed to ongoing uncertainty.
“European businesses have been obliged to hit the brakes for far too long and this is to the detriment of our recovery and competitiveness. EU policymakers must help them change gear from survival to success, instead of limiting their growth through over regulating,” the President of Eurochambres, Vladimír Dlouhý, said.
Business leaders here said they expected 2024 to be broadly similar to 2023, or slightly better.
“Whether that’s good or not depends on the year you have had, but our reading is that the uncertainty which arose as a result of the repeated shocks from Brexit, Covid, energy markets and inflation have left Irish businesses in a state of cautious optimism,” Shane Conneely, Chambers Ireland’s Director of Policy said.
“That said, concerns persist regarding supply side shocks and the ‘affordable access to energy and raw materials’ which is also a concern that is shared by businesses across Europe,” he added.
Irish entrepreneurs have, on the whole, been less pessimistic in the outlook than their European counterparts in recent years.
The report also points to a potential softening in the employment market in the year ahead, although it will be coming on the back of a period of considerable strength in the labour market with the unemployment rate at a historic low.
“Within businesses, we can see that the increasing costs are having an impact as more firms are planning to reduce headcount in the year. Simultaneously, fewer firms are planning to increase their numbers of workers. Together, these trends could lead to a softening of our hot labour market,” Mr Conneely concluded.