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Irish business in solid growth, no surge

Tuesday, August 05 10:13:54

Irish businesses are seeing solid, steady recovery and not a sudden surge, the latest KBC Bank Ireland / Chartered Accountants Ireland Business Sentiment Survey out today shows.

Irish business sentiment dipped marginally but held broadly steady in the second quarter of this year, it found.

The current reading of the survey suggests further if more modest GDP gains through this year while firms report increased activity and hiring but the trend in confidence remains marginally softer, it found.

It suggests that business growth is "stable and solid" with a "catch-up" in domestic spending now emerging.

The survey noted that inflation is absent in the economy as lack of pricing power sees 70pc of firms report flat or falling prices.

Commenting on the results, Pat Costello, Chief Executive, Chartered Accountants Ireland noted that Irish companies are reporting steady rather than spectacular increases in output in mid-2014 but this should be seen as the continuation of very healthy growth rather than any pointer to weaker conditions.

"The business sector was relatively early to see and signal the emerging upswing that is only now being captured in indicators like GDP. As such, the sentiment survey suggests further gains in GDP and jobs as 2014 progresses. The survey signals that hiring is now at its strongest since mid-2007 and is particularly encouraging in this regard," he said.

Commenting on the results, Austin Hughes, Chief Economist, KBC Bank Ireland added that the marginal decline in the business sentiment index may be disappointing but it isn't at all surprising given the dramatic improvement reported in the second half of last year.

"The survey is designed to capture changes in business conditions. So, these results point to step gains of late rather than any seismic change in activity levels. In turn, this reflects the reality of a recovery that is healthy but far from a return to the boom," he said.

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