CEOs more optimistic than in previous two years as businesses adjust to geopolitical challenges

• More than 9 out of 10 businesses have experienced cost increases in the past year, and margin pressure has led to profitability falling for 1 in 4 businesses
• The cost of doing business is a top priority for the Government following the next general election, according to CEOs

Ibec, the group representing Irish businesses, has released its annual CEO survey, revealing that CEOs in Ireland maintain a largely optimistic outlook both for their own businesses and the wider business environment. Eighty-seven percent of respondents rate the outlook for the next six months as good or very good, marking an increase from 66% last year. Moreover, ninety-one percent view current business conditions as good or very good, compared to eighty-six percent a year earlier. However, over ninety percent of businesses have encountered cost increases in the past year, leading to a decline in profitability for one in four businesses.

The research, conducted among over 230 CEOs, identifies labour cost increases as the primary challenge facing businesses, with skills availability reported as the second most significant obstacle. Furthermore, addressing the cost of doing business emerges as a top priority for the Government following the next general election, with housing and the climate agenda following closely behind.

Ibec CEO Danny McCoy said, “While the past few years have presented challenges due to the lingering effects of Covid and rising energy costs, businesses are currently more optimistic about the outlook for 2024. Most firms have experienced growth in customer demand and employee numbers but are facing increased margin pressures. The Irish economy has experienced exceptional growth in recent years and businesses are now consolidating activity at a high level.

However, the cost of doing business, driven by labour-related costs, remains a significant concern and this is something which we are in ongoing engagement with Government on.

With many upcoming elections both domestically and internationally, it’s not surprising that political uncertainty saw the largest increase in concerns within our research, rising by 9%. While energy and supply chain issues are still prevalent, CEOs have noted a slight easing.

With record levels of employment and low unemployment in Ireland, the availability of skills is likely to become a pressure point for businesses. While this is a positive problem to have, our economy must remain focused on addressing the shortfall, through our ability to attract workers from abroad and upskilling, particularly in areas of digitisation and AI."

2024 Indicators

According to CEOs, they anticipate that domestic sales will be stronger compared to the previous year, with the percentage of firms projecting an increase rising from 34% in 2023 to 43% in 2024. In terms of turnover, 63% of CEOs expect their firms to experience an increase, compared to 58% last year. However, there is a deceleration in employment growth, as only 47% of firms are expected to expand their headcount, down from 53% recorded in 2023.

Our CEO Survey 2024 is available to download here.