Cork Chamber Q2 Economic Trends Survey: Astute budgetary measures will be key to sustaining high levels of business confidence

12th August 2014

Cork Chamber’s second quarterly economic trends survey of 2014 reveals continued high levels of business confidence and positive growth in turnover, net profit and employment rates amongst Cork businesses. It also highlights however the importance of astute budgetary measures to sustain business growth and employment gains.

Discussing the survey results Cork Chamber President Gillian Keating stated that “findings are revealing of a continued positive outlook amongst Cork businesses with 88% of those surveyed reporting confidence in the future of their business. Almost six out of ten businesses (59%) reported an increase in turnover over Q2 and 56% reported increases in net profits. Looking ahead to the next quarter, 61% anticipate further increases in turnover and 53% anticipate further growth in net profit.

In terms of employment growth, the news is equally positive with 40% of businesses reporting increases in employee numbers over Q2 and 40% anticipating further increases over the next quarter. Currently, more than a third of businesses have vacancies advertised, a significant proportion of which are in sales, recruitment, IT and engineering.”

Ms Keating stressed that “the opportunity for growth now presented must not be wasted. It is imperative that government seize this long-sought after opportunity through the introduction of financial provisions in Budget 2015 that support and sustain continued growth and the most facilitative business environment possible.

More than half of all businesses (52%) believe that government should implement a smaller budgetary adjustment than the originally planned €2 billion in light of improvements in exchequer finances. Calls for reductions in income tax as part of the budgetary adjustment process were even higher again, with more than two thirds (67%) supporting such a proposal. Almost a fifth (19%) of businesses believe a reduction in the standard 20% rate should be a ‘top priority’, while more than a third (37%) ranked increases to the tax band ceiling of €32,800 as a ‘top priority’. The greatest support came for a reduction in the 41% income tax rate, which was ranked as a ‘top priority’ by 42% of businesses.

Of the priority areas which businesses believe government should focus on as part of Budget 2015, the most prominent calls centred on: targeted strategies to increase employment through reductions in employer costs and investments in skills and education; strategies to increase consumer spending in order to secure the resultant returns for the domestic economy through income tax and VAT reductions; and renewed investments in domestic infrastructure, particularly commercial office space construction, road improvements between Cork and Shannon; and broadband and energy infrastructure.”

Ms Keating concluded “Budget 2015 will be key in sustaining high levels of confidence and enabling further business growth and employment gains. Accordingly, it is imperative that shrewd policy decisions are taken to ensure that the business environment facilitates and incentivises increased business activity and growth.”

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