Almost half of Irish businesses plan to boost investment this year, led by builders and manufacturers, a new study indicates.
Companies plan to invest for the long term as they bid to steer through increasingly volatile trading conditions, according to accounting and consulting firm Azets Ireland.
Nearly half the 136 Irish businesses surveyed recently by the firm say they plan to increase spending on equipment and other assets this year.
The Azets Business Planning survey, published on Friday, shows 48 per cent of companies polled intend increasing investment in capital, that is on assets meant to result in long-term benefits such as plant, equipment and technology.
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The study also shows that Irish businesses’ investment plans for this year outstrip the rest of northern Europe.
The average Irish firm will increase capital spending by 22.8 per cent over the next 12 months, against 10.3 per cent in Sweden, 9.4 per cent in Denmark and 8.4 per cent in Norway.
Business investment in the UK will lag the Republic, according to the Azets survey, which shows that slightly more than one in three firms in that jurisdiction will step up capital spending. Irish builders on average expect to increase capital spending by almost 30 per cent.
The industry is widely expected to grow further this year on Government pledges to tackle the Republic’s chronic housing shortage and deteriorating infrastructure.
A report from engineers Aecom this week predicted that building will increase 5 per cent this year on the back of a strong domestic economy.
That followed similarly upbeat forecasts from other observers as the new year began.
Manufacturers follow builders closely with 27.5 per cent intending to boost spending in 2025, the survey says. More than six out of 10 small businesses in the Republic will invest more this year, as will half of the country’s midsized enterprises.
Irish companies can predict their cash flow up to 11 months on average, giving them a longer view of prospects than those in six other European nations surveyed, according to Azets.
Neil Hughes, the accountancy firm’s chief executive, noted that strong cash-flow forecasts and investment plans would aid business growth.
But he cautioned that managers would need to “continually review their plans for the future as they navigate rising international trade barriers and a challenging operating environment”.
Mr Hughes speculated that those changes combined with new inheritance tax rules could prompt business owners to consider succession.
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