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BP SURVEY Accountants Derry Gray BDO I expect things to remain flat for the first two quarters of 2012 but activity may pick up in September. If that sets a tone, then we may avoid a double dip. There is still a large amount of fear among consumers and it is fear that is really holding back growth. I don’t think there has been any significant improvement in liquidity and credit conditions for SMEs. If anything, it is the volume of applications for funding that has dropped off, as the expectation levels of success have deteriorated. A key issue for the future is competition. It is a concern that in the medium-to-longer term there may be a significant lack of choice of potential funding institutions in the Irish market. Rebuilding confidence is the key to recovery. In this regard, the following initiatives would help: The state-owned pillar banks should provide more working capital to businesses that have sustainable models and robust business plans. State development of key infrastructure projects like hospitals, where long-term savings and efficiencies can be driven to ultimately pay for the initial capital expenditure. This investment will retain key construction, project management and architecture skills in Ireland. Accelerate the sale and transfer of Derry Gray, BDO assets from Nama into appropriately funded private or JV hands. By getting our fixed asset and building stock into new ownership, new and less costly options will be made available for business, which will act as a pump primer for the economy. Tackle public sector reform and alleviate fears among the business community that the disproportionate cost of our public sector is a key barrier to our future growth. Ireland has many friends globally. We need to have a government department focused on overseas links and connections to filter investments, projects and activities linking Ireland with its connections. Tony Carey Cooney Carey I believe that we need to stop looking to the past and encourage business to work for the future. However, the economy’s well-being is intrinsically linked to our ability to export and attract foreign business. Therefore our ability to direct our future and avoid a double-dip recession substantially depends on the performance of the larger economies we are linked with. Over the past year, the banks have designed policies and refocused to enable them to lend, so there is hope for the coming year. Lending criteria are rightly focusing on cashflow rather than asset value. The challenge to the Tony Carey, Cooney Carey borrower is to prove to the bank that a solid business exists, irrespective of underperforming loans associated with property investment. The challenge to the bank is to restructure such loans to enable it to lend to good businesses. There is an urgent need for the government to provide liquidity. 60
BP SURVEY Accountants Put €100 into the market and it will circulate to produce €1,000. Those who have the courage to operate a business and provide taxation and employment should be recognised by government bodies and agencies. The feeling is quite the contrary at the moment and is most discouraging. Terence O’Rourke KPMG Given the importance of export markets, the outlook for Ireland’s economy depends on the international situation. But things will be tough for some time and no one in business is under any illusions about the challenges. Access to finance remains a major issue. More needs to be done to ensure that successful businesses are not starved of the working capital they need to manage the cyclical nature of their business. It’s also clear that more financial support is needed for high potential startups. Terence O’Rourke, KPMG Amongst its priorities, the government must remain steadfast in its commitment to retain our 12.5% rate of corporation tax, continue to roll out the recommendations of the Innovation Task Force, tackle the cost of publicly supplied services to business and continue to work hard promoting Ireland overseas. Brendan Jennings Deloitte The one thing that is certain with regards to the Irish economy is that it is hard to be certain. This uncertainty is likely to be felt quite keenly for the first half of 2012. Ireland’s economic performance is extremely dependent on what happens at both a European and global level. That said, we must remain positive about the strengths of the Irish economy. We know that 2011 was another strong year for exports and we have also shown great flexibility as an economy. The marketplace remains challenging, but many Irish companies are demonstrating resilience and innovation. The cost and availability of credit remains a key concern among many SMEs in Ireland. Banks have had to change the way in which they manage the process of giving credit, and it is now quite a rigorous process. Our advice to continued on page 62 YOUR NEEDS. UNDERSTOOD. Putting your business at the heart of our business for over 25 years. Audit – Tax – Advisory www.bdo.ie BDO is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business. BDO is the brand name for the BDO International network and for each of the BDO Member Firms. BDO, a partnership established under Irish Law, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent members firms.
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