Optimism among Ulster businesses rises
OPTIMISM among local businesses has grown significantly over the last year, according to a major report published today.
The Grant Thornton International Business Report 2010, which surveys more than 7,400 privately held businesses in 36 countries, shows that optimism of private companies in Northern Ireland has surged, albeit from a low level, by 46 per cent in the last year.
According to the report's scale, this gives Northern Ireland a score of minus six per cent which outperforms the Republic at minus 42 per cent.
However, despite the rise, local optimism levels are the lowest in the UK. Revenue expectations amongst local private companies also increased this year with 80 per cent expecting revenues to increase or stay the same in 2010, compared to only 27 per cent that expected revenues to increase in 2009. In addition, only 20 per cent expect their revenues to fall this year compared to 43 per cent that expected a fall last year.
Commenting on the report findings, Trevor Blayney, managing partner of Grant Thornton, said: "Overall, Northern Ireland businesses responded well to the economic downturn in comparison with the Republic and other UK regions. Business people have made the hard decisions, adjusted their costs relative to revenue and this shows a big improvement from the 2009 survey. While there is a clear upturn, it is expected that it will take time to flow through to profitability."
The survey also reveals that profit expectations amongst local private companies remain weak. Whilst 58 per cent of the private companies surveyed expect their profits to increase or stay the same this year, profitability expectation levels for Northern Ireland have plummeted from the 2008 level of 54 per cent to minus six per cent in 2010.
"According to our survey, local businesses are expecting the recovery to gather pace as the year progresses," said Mr Blayney.
"A total of 40 per cent of Northern Ireland privately held businesses expect to see an upturn in the second half of 2010 while 22 per cent expect an upturn in the first half of 2010. This is an important signal of improved business confidence and many businesses should now focus on strategies to exploit export opportunities and increase profits, revenue and market share whilst looking for ways to optimise cash control."
The findings of the Grant Thornton report also show that Northern Ireland businesses have put an increasing focus on the skills of their current workforce in preparation for the upturn. When asked to select more than one option, 50 per cent of respondents pointed to skills of the current workforce as being the highest priority followed by new target markets (46 per cent) and advertising (42 per cent).
Summing up the findings Mr Blayney said: "Businesses surviving the downturn will look back on these decisions as pivotal moments in their company's history. Focusing on the right things will give businesses under pressure more room for manoeuvre, while for others it will provide opportunities to realise their ambitions more quickly than they had planned."
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Tuesday 14 February 2012
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