A terrible year of setback in business is what 2022 will be remembered for

Nonetheless, there is at least some consolation for businesses in Ireland from all these chaotic changes.

The negative aspects are easier to identify as they have contributed to the loss of life in conflict, upheaval for millions and erosion of living standards for so many.

Even the global climate change agenda has been shredded.

On the financial front, the sharp rise in inflation to around 10 percent has been the most damaging. Energy inflation rose 27 percent in the 12 months to November 2022.

The accompanying rate hikes have caused repayments by tracker mortgage holders to rise from closer to 1.2 percent to about 3 percent.

Investors in major markets like the US have been lured to the stock market as the S&P 500 index fell about 20 percent. The Nasdaq is down about 33 percent.

The massive slump in tech valuations has pressured the sector and increased its need to scrutinize costs. This has resulted in the first real technology job cuts in Ireland in many years. After employment in the sector rose by around 25,000 last year, there was a fall of 11,000 at the end of 2022.

In the UK, where the FTSE100 index is down just 2 per cent this year, the best-performing stocks have been military hardware maker BAE Systems, mining giant Glencore and two oil majors, BP and Shell.

These names sum up the story of 2022, the year the world moved backwards.

All over the world there are signs that a recession is imminent. However, in Ireland there is a kind of economic consensus that we will have a slowdown but not a recession.

The view of the government and many economists is that exports of IT and pharmaceuticals will help Ireland avoid an economic downturn. This is hard to believe given that most of our major export markets are in or heading into recession.

The UK faces a very long and hard road back to economic recovery. The US faces significant challenges and is likely to slow in 2023, with a recent survey of economists putting the chance of a recession at 70 percent.

In the EU, places like Germany have been hit hard by the energy crisis and are likely to shrink over the next year.

This is quite a moot point for the Irish economy because even if we hold onto some GDP growth next year it will feel like a recession to most people.

High-end multinational operations can be very distant from most people’s economic lives.

That said, we can take some really positive lessons from the way 2022 has progressed and Ireland’s resilience.

Despite all this negativity at the international level, Ireland is enjoying record employment figures and record corporate tax receipts, which have bolstered the Treasury at what appear to be very uncertain times.

It meant the government had more cash in hand to hand out to people to help with utility bills, fuel and a host of other things. The budget was a record giveaway.

The crises of 2022 showed the benefits of Ireland’s economic strategy as we exported IT, pharma and food during a global pandemic. Aside from an abundance of natural resources, this isn’t a bad place.

It also showed the dexterity with which the National Treasury Management Agency (NTMA) has managed the national debt in recent years. Between 2020 and 2021, it raised over 40 billion euros in government bonds at an average interest rate of 0.19 percent. Unlike other countries that have to go to market and borrow heavily in the next few years, the NTMA has effectively bought us 10 years.

Many Irish exporters have had a record year. They have faced higher costs, supply chain uncertainties and Brexit, but have responded very well. Some of them might point to their order books for next year and say “what a downturn.”

The problem is that they have to fill those order books by accessing commodities at higher prices, paying higher wages and higher energy costs. There are no guarantees that they will be able to sustain this pace of growth. Especially when there are downturns in the markets they sell to.

I spoke to an exporting manufacturer whose order books are full, but they are struggling to even access the parts they need, let alone at the right price.

At home, the domestic economy is more likely to feel the pinch as some people cut spending. One restaurant owner I spoke to said he’s managed to recoup all of his higher costs from raising prices for customers.

This may all be very good for 2022, but he knows he can’t keep going like this. It might be a short-term stopgap, but if the downturn continues, it will come back to haunt it.

Internationally, China is only at the beginning of a “Living with Covid” policy. The human and health costs are likely to have economic costs as well.

Despite the uncertainties, there were some positives, especially towards the end of the year.

The mood music surrounding Brexit has improved. Unfortunately, the Conservative UK government is unlikely and unable to seek a closer relationship with the EU in the short term. Any significant steps in this direction will require a change of government after the next elections.

In the US, the midterm elections and the relative success of the Democrats have at least temporarily halted the rise of crazier tendencies among Republicans.

All of these events have an impact on the environment in which larger Irish companies operate.

If 2022 was the year of regression, perhaps our best hope for 2023 is not going any further in the wrong direction.