According to a recent international business survey conducted by Grant Thornton, only 16% of Irish companies view geopolitical instability resulting from potential events such as war or a potential second term of Donald Trump as US president as a “possible restriction”, in contrast to the global average of 43%.
This seeming lack of concern is attributed to the prevailing belief that geopolitical uncertainties are unlikely to pose any detrimental effects, despite the upcoming US presidential election in November, according to the report that studied business sentiments across 28 nations.
These sentiments play a vital role in shaping the amount of optimism medium-sized Irish firms possess regarding the economic prospect of Ireland in the upcoming 12 months. The report notes that two-thirds of the companies surveyed are predicting a positive year ahead.
Despite the optimistic outlook, slight decrease in confidence has been observed among Irish businesses compared to the last survey. A notable factor affecting the level of optimism includes a 16-point jump in the portion of Irish companies considering labour costs, which stands at 44%, as a growth restriction.
Grant Thornton highlighted that companies might be continuing to negotiate with the inflationary pressures arising from the cost-of-living crisis. Approximately three-quarters, or 74%, anticipate salary raises in the following 12 months.
According to Patrick Dillon, the head of deal advisory at Grant Thornton, the report depicts a different image of Ireland, with its medium-sized companies paying almost no attention to possible economic unpredictability or geopolitical unrest in the coming months. He also added that “despite some concerns regarding raised labour costs as a future business growth restriction, we remain incredibly positive, possibly boosted by the country’s robust financial status, which starkly contrasts with our international counterparts”.