The Institute of Directors (IoD) in Ireland, the membership body representing 3,000 directors and business leaders, has today published the stark findings of its latest quarterly Director Sentiment Monitor. The new survey shows that business confidence has been severely impacted by the political and economic uncertainty surrounding Brexit as the October 31st deadline looms large.
The survey was completed by 291 directors and business leaders (78% male, 22% female,) who are members of the IoD in Ireland. 63% of the respondents are current board members (of which 42% are CEOs/MDs), with the bulk of the remainder in senior executive roles. The research was carried out between the time period 1st-9th July 2019.
Maura Quinn, CEO, IoD Ireland, said:
Business confidence is plummeting. Our latest Director Sentiment Monitor survey shows that the uncertainty evident over the past twelve months has intensified in the last quarter. The message is clear: Irish business leaders are worried, and they want the Irish Government to take note and deliver accordingly in next month’s Budget, which is just weeks before the current Brexit deadline.
Key survey findings:
- Business leaders’ optimism in economy drops 31% year-on-year. When asked how they felt about the Irish economy in Q2 2019 versus Q1 2019, just 15% said they were ‘more optimistic’. This was 32% in Q1 2019. For the equivalent period in 2018 (i.e. Q2 2018), this figure was 46%, which means there has been a 31% drop in optimism year-on-year.
- 92% of business leaders believe that Brexit’s impact on the Irish economy will be negative in the short-term (up from 89% in Q1 2019), with 58% believing it will be negative in the long term (an increase from 56% in Q1 2019).
- With the survey respondents citing ‘the effects of Brexit’ (26%) and ‘political/economic uncertainty’ (23 %) as the two biggest risk factors facing their primary organisation, a clear majority (63%) admit that the continued Brexit uncertainty has ‘impacted their organisation’s strategic planning’.
- There has been a 10% drop from Q1 (60%) to Q2 (50%) in business leaders believing ‘the financial performance of their primary organisation will improve in 2019’.
- There has also been a sharp decrease in business leaders anticipating opportunities for growth in the UK market (30% in Q1 to 20% in Q2).
- Interestingly, now, 67% of business leaders say they are ‘sufficiently prepared’ for Brexit, a drop of 4% on the first quarter in 2019.
- 89% of respondents think ‘the Government should deliver a conservative Budget in October in expectation of a no-deal Brexit’.
The dramatic fall in business confidence is reflected throughout the IoD survey, with a majority of respondents (56%) citing the lack of supply of housing and/or affordable rents as impacting their ability to attract talent to their organisations. Furthermore, 43% of respondents say the cost of insurance is detrimentally impacting their business.
Maura Quinn added:
Overall, this is a challenging period for Irish business from a number of perspectives but, it is clear, Brexit is the dominant concern as we face into what could be a difficult autumn.