Irish business seeing ‘silent slowdown' as confidence plummets
Irish businesses are much less optimistic about the future than they were in late 2024, according to Azets Ireland, suggesting a 'silent slowdown' in the
economy
may be under way.
Conducted between April and May, the corporate advisory firm's latest Barometer Survey, a poll of 119 mid-market companies in the Republic, revealed decreasing confidence levels among firms in recent months.
Overall, survey respondents rated their economic prospects at 5.5 out of 10, down from 6.5 out of 10 in the previous survey in November.
Even so, Irish businesses are the second most optimistic in northern Europe, according to the survey, ahead of the
UK
,
Norway
and
Finland
.
READ MORE
Azets said the latest score was the lowest since the survey was inaugurated one year ago. The data suggests a 'silent slowdown' may be under way in the Republic, the firm said.
'Irish business leaders are steering their organisations through one of the most uncertain periods in recent memory – where trade tariffs, geopolitical risks and economic uncertainty are increasing,' said Neil Hughes, chief executive at Azets Ireland.
'Our latest barometer shows that this volatility is beginning to dent business confidence, with a marked drop in optimism since late last year
Businesses said they were most concerned about trade and tariff uncertainty stemming from recent shifts in US trade policy under US president Donald Trump. Geopolitical instability was cited as the second biggest concern.
However, 41 per cent of firms said that higher labour costs remain a top concern, particularly among mid-sized businesses.
Declining confidence was particularly evident among microbusinesses with fewer than 10 employees. This is a 'particularly concerning trend', Mr Hughes said.
'These firms report the lowest confidence in both their financial health and future prospects,' he said. 'They are the backbone of local economies across Ireland, yet rising labour costs and the growing cost of doing business are putting them under real pressure.'
[
I gave my friends hats which said 'Make America Hate Again'. That's what Trump is trying to do
Opens in new window
]
More reassuringly, Mr Hughes said, the survey reveals Irish businesses are entering this period of volatility in relatively sound financial health.
Survey respondents ranked their financial wellbeing at 6.6 out of 10 overall, second only to Denmark, although larger businesses tended to outperform their smaller competitors in this area, Azets said.
The OECD last week warned that Mr
Trump's
trade policies will damage consumer and business sentiment in Ireland and could 'weigh heavily' on economic growth if the US administration adds pharmaceuticals to the list of imports subjected to tariffs.
Washington's policies have tipped the world economy into a downturn clouded in heightened uncertainty, with the US among the hardest hit, it said in its twice-yearly economic outlook report.
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