Coalition can boost faith in economy - survey

THE NEW Government will boost international confidence in the Irish economy, more than three-quarters of chief financial officers (CFOs) at Irish companies claim.

Some 76 per cent also told a Deloitte survey that they believed the Coalition would have a positive impact on political reform and job creation. A slightly lower proportion – 65 per cent – agreed fiscal policy would improve under the new Government.

However, CFOs at Irish companies were less likely to believe that the leadership change would ease problems faced by businesses as a result of the banking crisis.

Only 11 per cent said the Coalition would help improve the cost of credit, while just shy of a third – 32 per cent – said the Government would make a difference to credit availability for small businesses.

Some 19 per cent said the new Government would make a difference to levels of taxation.

According to Deloitte’s quarterly survey of CFOs, the three most pressing measures finance directors believe the Government should focus on are public sector reform, cost-cutting and job creation.

In line with previous surveys, the CFOs continued to be more optimistic about the future revenues of their own businesses than they were about the general economic outlook.

Around 50 finance directors of the largest listed companies, private companies and subsidiaries of multinationals were questioned by Deloitte in March for the seventh edition of the survey, which it says is a barometer of sentiment among big business in Ireland.

Four-fifths of those said they believed it would be 2012 before the economy recovers.

Meanwhile, more than 40 per cent said rising oil prices would force an increase in the prices their companies charge for goods and services, while almost a third indicated that they had already passed on an increase.

More than a third – 35 per cent – said exchange rate risk was the highest risk to their companies’ balance sheets.

Deloitte partner Shane Mohan said sentiment among the CFOs had stabilised in the first quarter of the year.

“However, it’s clear that the uncertainty that was so pronounced in previous quarters is still being felt and still lingers. Rising interest rates, political uncertainty in North Africa, rising oil prices and the impact of the Japanese earthquake on the global economy are all contributing to this.”

Mr Mohan added “the boost that a new Government has given to Irish business is to be welcomed”.

Cfo Survey Key Figures

76%of chief financial officers who believe the Coalition will boost international confidence in the Irish economy

65%said fiscal policy will improve under the new Government

11%said the coalition will improve the cost of credit