61% of directors 'more optimistic' on the economy compared to 30% in previous quarter.
A new survey of its members by the Institute of Directors (IoD) in Ireland has found that business leaders’ optimism in terms of the Irish economy and their organisations’ future financial performance has increased markedly in recent months. The Government’s effect on both consumer confidence and business decision-making has also seen notable increases in positive sentiment from business leaders.
The IoD research for Q2 2021, published today, finds that 61% of directors are 'more optimistic' with regard to the Irish economy compared to 30% in Q1 2021, a 31% increase quarter-on-quarter.
In respect of financial performance, the IoD research has found that 71% of business leaders believe the financial performance of their primary organisation will improve in Q3 2021, an increase of 27% from 44% who believed it would improve in Q2 2021. In addition, 67% of business leaders believe the financial performance of their primary organisation will improve for the year 2021, an increase of 12% from 55% in Q1 2021.
Maura Quinn, Chief Executive of the Institute of Directors in Ireland, commented:
“We are seeing a resurgence of optimism among business leaders. Towards the end of 2020, it was evident that positive sentiment was returning. The lifting of many public health restrictions in recent months along with the roll-out of the national vaccination programme are playing their part. Crucially, these positive developments are being mirrored in our key overseas markets and our research reveals optimism with regard to potential market growth opportunities in the EU and US markets, in particular. That positivity is also reflected in the finding that only 3% of respondents signified that they were not expecting any growth in market opportunities during the third quarter of the year. Many of the trends in our research findings have an upward trajectory, which is good news.
“The Government, too, will be encouraged by these findings. Our research has found that business leaders view more positively the effect of its performance on consumer confidence and on business decision-making.”
The IoD research for Q2 2021 has found that the effect of the Government’s performance on consumer confidence and on business decision-making has seen marked increases in positive sentiment.
With respect to consumer confidence, 49% of business leaders in Q2 2021 believe the effect of the Government’s performance to be positive, an increase of 32% from 17% in Q1 2021. In relation to the effect of the Government’s performance on decision-making, 38% of business leaders believed it to be positive, an increase of 21% from 17% in Q1 2021.
It is notable, too, that 40% of the survey respondents judged the impact of the Government’s performance on their decision-making as having ‘no effect’, a 7% improvement from 47% in Q1 2021.
The key findings of the IoD’s Director Sentiment Monitor for Q2 2021 include:
The Economy: In respect of the Irish economy, how do you feel now compared to the previous quarter?
- More optimistic: 61%
- More pessimistic: 11%
- No change: 28%
Financial Performance (Quarter): Do you think that the financial performance of your primary organisation will improve in Q3 2021?
- Yes: 71%
- No: 22%
- Don't know: 7%
Financial Performance (Year): Do you think that the financial performance of your primary organisation will improve for the year 2021?
- Yes: 67%
- No: 27%
- Don't know: 6%
Government's Performance: What do you believe has been the effect of the current Government's performance to date on the following?
- Positive: 49%
- Negative: 35%
- No Effect: 16%
Your Business Decision-Making
- Positive: 38%
- Negative: 23%
- No Effect: 40%
Market Growth: In respect of your primary organisation, in which markets do you anticipate opportunities for growth during the third quarter of 2021? (Main respondent choices.)
- Domestic: 54%
- EU: 34%
- USA: 23%
- UK: 20%
- China: 9%
- Japan: 4%
- Canada: 4%
- Other Emerging Markets: 8%
- Not Expecting Any Growth: 3%
The findings in this survey have been rounded up or down to the nearest decimal point.