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Ireland’s growth forecast has emerged as the strongest globally

A new survey published shows that despite the global economic challenges, Ireland’s growth forecast has emerged strongly.

The latest Accenture/S&P Global Ireland Business Outlook survey shows a sustained sense of optimism among Irish private sector companies, buoyed by expected improvements in export performance.

The survey reveals that receding energy and raw material price pressures contributed to an overall cooling in inflation expectations, but it also cautions that challenges persist in the form of wage pressures.

However, Irish firms expressed relief as cost constraints appear to be easing, with an upwardly revised profit projection indicating an expected positive trajectory ahead.

Accenture reported that the headline net balance for business activity in the combined manufacturing and services sectors decreased to 43% in June, down from 47% in February.

According to the survey, the lower headline result reflected more muted confidence in the manufacturing sector (37%), while the mood in the services sector was little changed from February (48%).

Despite this decline, Ireland’s net balance was the highest among the 12 countries for which comparable data are available, and it was significantly higher than in the second half of 2022.

Accenture said that while energy and raw material costs fell, companies’ inflation expectations were usually lower than in the previous outlook survey.

42% of businesses projected increasing non-staff expenditures in the next year, a modest decrease from 44% in February.

Firms, on the other hand, anticipate an increase in employee expenses during the next 12 months. Wages are expected to grow by 64% of Irish private sector businesses, up from 59% in the preceding survey period.

These cost hikes will also be passed on to customers by Irish businesses. Firms forecasting price increases, on the other hand, fell from 31% to 28% in June.

While still excessive in comparison to historical statistics, this was the lowest reading since February 2021, according to the survey.

Meanwhile, as inflationary pressures have receded, companies’ opinions on their profitability have improved. Profit growth forecasts for the coming year increased from 21% to 24% in June. According to Accenture, this was the highest reading since February 2022 and the third highest globally.

According to Hilary O’Meara, country managing director of Accenture in Ireland, Ireland’s growth prediction is the strongest in the world.

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