A third of Irish companies are considering laying off staff as risks to the economy mount amid the cost of living crisis.
A survey released this morning by professional services firm Aon Ireland shows that 41 per cent of companies surveyed also expect the country to enter recession within six months.
And that despite broader expectations that Ireland will avoid recession in 2023. Rating agency Standard & Poor’s recently forecast that economic growth will continue, albeit modestly, next year and accelerate again in 2024.
But Aon Ireland’s report reflects the impact the cost of living crisis is having on households across the country.
Aon’s Business Decision Maker Pulse surveyed 228 senior executives from companies each with 250 or more employees between October and November.
They cite an economic slowdown as the top risk they face, followed by inflation and a failure to attract or retain talent.
Just over half – 52% – believe rising energy costs will affect their company’s ability to grow over the next six months.
Half of the business leaders surveyed said they are considering cutting daily spending to mitigate the impact of rampant inflation on their corporate finances.
Worryingly, 32pc said they are considering reducing their headcount to deal with rising costs, while 27pc said they are looking to streamline their supply chains.
“Many executives are now actively considering how to manage costs while continuing to build a workforce that attracts the best talent who can help drive innovation,” said Rachael Ingle, CEO of Aon Ireland.
She added: “But as the likelihood of a global recession increases, it is clear that economic risk is becoming the driving factor behind how Irish executives make business decisions in the coming months.”
However, she said that while companies adapt to current economic realities, they should be mindful of the need to continue investing in their future.
According to the Central Statistics Office, there were 2.55 million employed people in Ireland in the third quarter of this year, up 3.4 per cent from the third quarter of 2021.
Ireland operates at virtually full employment.
That Irish Independent reported this week that the Department of Enterprises has issued a record number of work permits this year after clearing a backlog of applications built up during the pandemic.
To date, nearly 38,000 permits have been approved for non-EEA nationals, more than double the 2021 figure.
At the current rate of about 3,500 permits issued per month, the state is on track to approve well over 40,000 work permits this year.
Last month, a survey by Ireland’s American Chamber of Commerce found that 61 percent of US multinationals plan to increase employment here over the next year, but a third warned that housing for workers was a problem.
https://www.independent.ie/business/irish/a-third-of-irish-businesses-considering-letting-staff-go-amid-growth-fears-for-the-economy-42206509.html A third of Irish companies are considering layoffs amid growth fears for the economy