THREE times as many firms think the Budget will have a positive impact on Irish economic prospects as take a negative view, according to the winter Business Sentiment survey produced by KBC Bank Ireland and Chartered Accountants Ireland.

But the impact will be small — even negligible — the company accountants who were polled think. “Firms seemed to be taking a long-term view of the Budget measures,” Tom Fitzpatrick, president of Chartered Accountants Ireland, said.

Balance

“The majority of those surveyed feel Finance Minister Brian Lenihan got the balance right between tackling the public finances and not damaging the economy, although there is little expectation that the stimulus measures announced in Budget 2010 will have a major effect on activity.

“The strongly held view is that the impact will at best be modest and is more likely to be negligible,” Mr Fizpatrick said.

Businesses reported that conditions remain tough but are clearly altogether better than they were 12 months ago.

Austin Hughes, chief economist at KBC Bank Ireland, said that softer activity had prompted a further fall in employment.

“It remains the case that job losses were widespread but the scale of those cuts has eased slightly and there has even been a slight pick-up in the number of firms increasing their payrolls.”

He said sharp reductions in job numbers and signs of continuing downward pressure or costs should make Irish companies more competitive.

“Although this has been a very painful process, the sentiment survey suggests the Irish cost climate has adjusted very sharply in the past year. There are tentative signs from the employment component of the winter survey that businesses believe the bulk of the adjustment to the downturn may be behind us.”

The survey takes the views of leading chartered accountants.

- Brendan Keenan

Irish Independent

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Tags: Budget, Budget Balance