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Tech firms express economic optimism
Tuesday, April 02 2002
by Matthew Clark
Irish business people are more optimistic about the economy compared to six months ago, with technology business leaders among the most confident.
A survey published on Tuesday said that over the past six months, 41 percent of business leaders said that they believed the overall business environment had improved slightly. One in ten said that it has "improved significantly."
The survey also pointed out that the outlook is thought to be good among business leaders, with 58 percent forecasting improvements over the next six months. These figures compare to 29 percent of businesses that were optimistic in June of 2001 and a mere 15 percent in October of the same year.
The survey, performed by Deloitte & Touche after 164 interviews with Irish business people, said that those involved in the financial services and the technology, media and telecommunications sectors were most likely to be upbeat about prospects for the economy.
In the technology, media and telecommunications sector, 61 percent of respondents expressed an increase in confidence compared with the weeks immediately following 11 September. A further 66 percent expect an improvement in economic conditions by summer 2002.
The manifestation of the improving economy will be an increase in sales, according to 91 percent of respondents. Meanwhile 51 percent say employment levels will rise and 44 percent claim that wider margins will be the result of the recovering economy.
Mark Campbell, marketing manager at Deloitte & Touche, told ElectricNews.Net that the confidence is being driven by hard numbers. "People are seeing solid sales for the first time in months and upbeat attitudes from venture capitalists," he explained. "Three months ago they were hoping for an upturn, but now they (business people) seem to think they really have turned the corner and the worst is behind them."
In the financial services sector, seventy-five percent claim that their confidence in the Irish economy has improved over the past six months, and 70 percent expect to see more improvement between now and June 2002. "The people in the financial services sector have seen it all and they know the difference between a cough or sneeze and the flu; I think that's the explanation behind their confidence," Campbell said.
But Deloitte & Touche points out that confidence in the economy is not universal. Thirty-two percent of business people say their confidence in the economy has deteriorated when compared with six months ago and nine percent say that there has been a significant deterioration. Another quarter expect to see a deterioration over the next few months.
Among all respondents, the slowdown in the US economy is the biggest challenge to overcome according to 40 percent of business people. However this figure is down from 55 percent who worried about the US slowdown in July 2001. According to Deloitte & Touche reliance on the US market is felt strongest by companies in the technology, media and telecommunications sector, with 59 percent of respondents in this sector revealing that the US slowdown was their number one challenge.
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