Cautious Optimism Among Businesses

Optimism among local privately held businesses on their economic outlook for 2010 has improved considerably over the last year.

That's according to the latest International Business Report survey from finance and business advisors, Grant Thornton UK LLP.

Their International Business Report 2010, which surveys more than 7,400 privately held businesses in 36 countries, shows that optimism of private companies in Northern Ireland has surged, albeit from a low level, by 46% in the last year.

This gives Northern Ireland a balanced score of minus 6% which outperforms the Republic of Ireland at minus 42%, however local optimism levels are the lowest in the UK.

Revenue expectations amongst local private companies also increased this year with 80% expecting revenues to increase or stay the same in 2010, compared to only 27% that expected revenues to increase in 2009.

In addition, only 20% expect their revenues to fall this year compared to 43% that expected a fall last year.

Trevor Blayney, Managing Partner of Grant Thornton (pictured) said: "Overall, Northern Ireland businesses responded well to the economic downturn in comparison with the Republic of Ireland and other UK regions.

"Business people have made the hard decisions, adjusted their costs relative to revenue and this shows a big improvement from the 2009 survey. While there is a clear upturn, it is expected that it will take time to flow through to profitability."

According to the survey profit expectations amongst local private companies remain weak. Whilst 58 per cent of the private companies surveyed expect their profits to increase or stay the same this year, profitability expectations levels for Northern Ireland have plummeted from the 2008 level of 54 per cent to a low balance score of minus 6 per cent in 2010.

"A total of 40% of Northern Ireland privately held businesses expect to see an upturn in the second half of 2010 while 22% expect an upturn in the first half of 2010.

"This is an important signal of improved business confidence and many businesses should now focus on strategies to exploit export opportunities and increase profits, revenue and market share whilst looking for ways to optimise cash control," he continued.

The findings of the Grant Thornton report also show that Northern Ireland businesses have put an increasing focus on the skills of their current workforce in preparation for the upturn.

Stability is expected in the prices sold for goods and services this year. According to the report, 70% of private businesses expect their selling prices to remain the same or increase in 2010 and only 28% expect their selling price to decrease.

(BMcC/GK)