Irish companies are pessimistic about earnings prospects despite hiring plans

Irish companies say they are pessimistic about earnings prospects over the next 12 months but are still hiring and raising wages.

A new quarterly survey by Accenture and S&P has revealed that Irish companies expect earnings to be under pressure next year. However, sentiment had improved slightly since June, when Irish companies forecast earnings to fall for the first time since the survey began in 2009.

The survey of 600 Irish companies also showed that companies here are more optimistic about the year ahead than their peers in the five other European countries featured in the report.

This outlook comes as Irish companies grapple with rising input costs, supply chain challenges and the impact of the energy crisis. However, input price increases in Ireland over the past month have been slightly below the euro-zone and UK average.

Despite continued pessimism about future earnings growth, Irish companies remained optimistic about expanding their teams. Net employment rose 2 percent to 26 percent as Irish employers signaled strong expectations for new hires next year.

Just 23 per cent of those polled said they were not confident of finding the necessary staff over the next year, with Ireland’s manufacturing and service employment outlook last month being the highest in Europe.

This marked a change in attitude from earlier in the year. In early 2022, Irish employers surveyed said they intended to scale back their hiring plans.

As companies develop new hiring plans, firms are also facing the impact of rising wages, with wage increases here exceeding the average eurozone trend. The UK and Germany now face the highest total labor costs in the survey.

Irish businesses remain intent on raising prices to customers in response to the combination of wage pressures and inflationary challenges.

However, the report noted that those gains slowed here in October as companies tried to boost demand while consumers tightened their belts.

“It comes as no surprise that this survey shows that inflation and rising costs remain a major concern for businesses in Ireland,” said Alastair Blair, Managing Director of Accenture Ireland.

“As we face the potential likelihood of a global recession, it is clear that this will only add to inflationary pressures and put additional strain on supply chains.” Irish companies are pessimistic about earnings prospects despite hiring plans

Fry Electronics Team

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