As the two-year anniversary of the Confidence and Supply Agreement between the Government and Fianna Fáil approaches, a marginal majority (56%) of directors are in favour of extending the agreement from three to five years according to the Director Sentiment Monitor, a new quarterly survey of director sentiment launched today by the Institute of Directors in Ireland (IoD).
- 70% of directors approve performance of the current Government
- Business leaders are more optimistic about the economy compared to end 2017
- 36% believe Ireland is ill equipped to compete internationally post-Brexit with housing supply and talent shortages considered main roadblocks
- 57% of directors expect business performance to improve in the second quarter
- 84% of companies closed doors for one or more days during Storm Emma
The IoD Director Sentiment Monitor* survey of 302 of its members including chief executives, senior executives, non-executive directors and chairpersons, found that 20% of those surveyed are neutral in their opinion regarding extending the Confidence and Supply Agreement while a further 20% would oppose such a measure. However, 70% of business leaders consider the performance of the current Government as good to excellent, while the remainder assess Government performance as fair to poor (30%).
Half (52%) of business leaders surveyed say they are more optimistic about the Irish economy now compared to the end of 2017 with 38% reporting no change in levels of optimism.
Commenting, Maura Quinn, Chief Executive, Institute of Directors in Ireland, said:
“While directors are broadly supportive of the Government’s performance to date, it should be noted that only a marginal majority favour an extension of the Confidence and Supply Agreement. Clearly there is work to be done to improve optimism and extend the positive rating by business into a buy-in for long-term support of the Government.”
When asked to specify the most critical points to Ireland’s future development as part of Project Ireland 2040, 66% of directors want to see a focus on increased infrastructure spending, 63% on housing investment and 39% on preparing for Brexit.
Brexit and business outlook
Opinion is divided among Ireland’s business leaders as to the country’s ability to compete for business on an international scale post-Brexit with 40% of the view that Ireland is well equipped to compete, yet 36% disagree.
Concerns over housing supply (50%) and the availability of talent with key skills (46%) are considered the main roadblocks to competing internationally post-Brexit with almost 1 in 3 also raising concerns about border controls / delays (31%) and trade barriers (29%).
Notwithstanding concerns about Brexit, directors are relatively positive in respect of business performance with 57% of directors expecting business performance to improve in the second quarter of 2018, rising to 64% in 2019. The most significant opportunities for growth are expected in the EU (48%) with the UK (19%) and US (18%) also key markets. 10% of companies see opportunities in emerging markets in 2018.
“The results of the Director Sentiment Monitor for Q1 reflect the broader picture with positive business sentiment and growth in employment. Directors have a positive attitude to performance in the months ahead, however; concerns about Ireland’s ability to compete for business post-Brexit, particularly regarding housing supply and talent, present a challenge,” said Maura Quinn.
Business disruption and challenges
The effects of Storm Emma were felt by 84% of companies who closed their doors for one or more days. 45% reported a moderate to major impact on productivity as a result and one-third (32%) cited a moderate to major impact on employment costs.
26% of directors say that labour sourcing and retention is the single biggest risk facing their organisation. Even so, 48% of companies increased employee numbers in the first three months of 2018. 41% of business leaders report no change with 8% decreasing employee numbers in the period.
*The Director Sentiment Monitor is a new research initiative from the Institute of Directors in Ireland (IoD). It tracks director sentiment on a quarterly basis and will compare and contrast trends and attitudes among business leaders in Ireland. Online survey conducted between 5th-16th April 2018 with a sample of 302 members of the Institute of Directors in Ireland.