In these turbulent times, understanding current trends and business sentiment is more important than ever before. On this page, you'll find a combination of economic and business data, market insights and thoughts from our subject matter experts to help you better understand and respond to the changing environment.

Andrew Webb comments on April 2022 CSO Unemployment Figures

The unemployment numbers continue to encourage but the coming months will be crucial in determining where the economy is heading. Rising costs are seeing more people having to divert spending away from desirable items towards essential items like heat and food. 

Jarlath O'Keefe comments on February 2022 CSO Import/Export figures

The CSO figures for February 2022 demonstrate continued growth of exports to Great Britain with an increase of 21% when compared with February 2021. This brings the total value of exports from Ireland to Great Britain for the month to just over €1billion. This increase was driven by the rise in exports of food and live animals, confirming the continued reliance of Great Britain on the Irish market in these key sectors. 

Irish businesses look to reduce dependency on UK market as Brexit red-tape issues continue

Indirect Tax and VAT Partner at Grant Thornton Ireland, Jarlath O'Keefe, comments on the findings of the latest Grant Thornton International Business Report:

Irish businesses are looking to reduce their dependency on the UK market amid continued fallout from Brexit, according to Grant Thornton Ireland’s International Business Report. The survey of 62 mid-size Irish businesses highlights the ongoing concerns for any further Brexit-related checks or red-tape measures that may come into effect in 2022; with over a quarter (27%) of Irish businesses reducing their exports to the UK, and a further 21% reducing their reliance on UK suppliers.

Labour shortages and access to talent a major challenge to Irish businesses

Chief Economist at Grant Thornton Ireland, Andrew Webb, comments on the findings of the latest Grant Thornton International Business Report:

'Irish businesses are facing mounting pressures in sourcing and keeping skilled workers across 2022. The shrinking pool of skilled workers poses a number of challenges in terms of business growth, coupled with the challenges of inflation, supply chain issues, and rising energy prices.

Despite these issues, there is room for optimism on the current state of play in the labour market. Over half of Irish businesses are looking to invest in the upskilling of staff over the next twelve months, in turn allowing them to grow and develop their enterprises, and nearly half of Irish businesses (45%) expect to grow their teams and increase employment over the coming year.'

Optimism high among Irish businesses despite growing concerns for skills shortages

Mick McAteer, Managing Partner of Grant Thornton Ireland, comments on the latest findings of the Grant Thornton International Business Report:

‘Businesses remain optimistic for the coming year as the recovery from the pandemic prompts an increase in demand but we’re seeing increasing concern and new challenges to growth in spite of this. Skills and talent shortages, rising energy and therefore production costs, and the increasing cost of doing business as markets return to more stable trading patterns, are of great concern.

‘From a labour perspective, there is a skills shortage globally in a number of sectors that represents a major challenge for businesses in terms of growth, including here in Ireland, and the lengthy visa-processing times and other red-tape hurdles have only exacerbated this issue. Rising costs of doing business, rocketing energy prices and supply chain challenges also hinder the growth prospects in a variety of sectors and industries.

‘But with business optimism climbing to a three-year high, and many businesses insulating through new business processes and digital transformation, there is hope for businesses to continue growing in both domestic and international markets over the coming year.’

IBR H2 2021 - Irish highlights

Optimism

Rising optimism has been a feature of the IBR since the low point of H1 2020 when 39% of Irish businesses were optimistic about the next twelve months. Since then, as vaccine development and a successful roll out enabled economic restrictions to give way to reopening, business optimism has been on a strong upward trend. The latest IBR finds 85% of businesses optimistic about the economic outlook. This is up on the 76% from H1 2021 and 15 percentage points higher than the global average.  Of course, the emergence of the Omicron variant has changed the economic context yet again but the impact of that will not be known until H1 2022. The current expectation is that the impact from the Omicron variant will not be as severe as previous Covid waves.

Outlook

The general trend of Irish business optimism carries through to the outlook indicators in the IBR.  Almost two thirds of IBR respondents expect to increase their turnover and the buoyant labour market, which has seen job listings surpass pre-pandemic levels, appears set to continue. 45% of businesses expect to increase their staff compliment and only 13% expect to see a decrease.  Given the new trading relationship between the EU and UK, the IBR’s export indicators provide a telling insight. 37% of respondents expect to increase their export sales but only 23% expect to sell into new markets suggesting a steadier state post-Brexit than might have been feared.

Constraints/Restrictions

While optimism and outlook indicators are displaying strong positive sentiment, there is a strengthening sense that constraining factors to growth are increasing. Almost half of firms (48%) think that economic uncertainty is a constraint on their business, up 10 percentage points since H1 2021. The most significant changes in terms of constraints have come via energy costs in the labour market. For the first time in IBR’s history, more than half of businesses (55%) cited energy costs as a constraint on their business. For context, the average annual score in this indicator between 2013 and 2020 was 18%.

Similarly, the availability of skilled labour has shifted dramatically in the percentage of businesses citing it as a constraint on their business. 63% now reference the availability of skilled workers as a constraint, up from 37% in H1 2021. The previous highest reading was 50% in H2 2017.  This constrained availability of skilled labour is contributing to a corresponding increase in concern over labour costs as a constraint. 56% of businesses now cite this as a constraint, up from 27% in H1 2021.  This scale of this change between H1 and H2 suggests that the strength of the labour market has emerged from the pandemic at a much faster pace than expected.

Investment

Investment intentions were up in comparison with H1 2021, but the scale of increase identifies areas of focus for Irish Businesses. 42% of firms expect to invest in R&D, up from 40% in H1 2021. The percentage of businesses intending to invest in Technology fell from 48% to 40%, which may indicate that a lot of technology investment took place to implement home working and ensure business continuity during the early stages of the pandemic. Perhaps reflecting the tight labour market, 55% of business now expect to invest in staff skills, up from 35% in H1.

Budget 2022 summary

The Minister presented his first budget in two years from Leinster House amid a period of post pandemic uncertainty with rising cost of living pressures, a continuing housing crisis and the need for action on climate change.  He outlined his plans of helping the nation recover from the pandemic, by restoring our public services and living standards, and repairing the public finances.