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IMAGE HERE INTO GREY AREA.
By Elaine Sloan & John Clarke
J.3156
Behaviour & Attitudes
Business Confidence Monitor
1st Quarter 2012
2
Introduction
Given the state of the economy, and the uncharted waters businesses find
themselves in, Behaviour & Attitudes conduct a Business Confidence survey on a
quarterly basis in tandem with its Consumer Confidence survey.
A questionnaire has been developed for the business monitor which covers issues
such as recent business results, projected employment levels, profit margins and
expectations for the forthcoming year.
The quarterly survey is conducted via telephone amongst a sample of 350 Business
owners/Managers countrywide.
The sample is drawn from a ‘deduped’ mix of reputable business listings including
Bill Moss, Data Ireland, the Irish Times and Business & Finance Top 500 companies in
Ireland
3
Sampling Approach
The chart below sets out the profile of business company size in Ireland (Source:
CSO and Bill Moss) compared with the achieved Behaviour & Attitudes Business
Confidence Monitor sample:-
No of employees % % %
1-3 42 43 42
4-9 28 28 28
10-19 14 14 14
20-50 11 11 11
50-250 6 5 6
250+ 1 1 1
The survey data is subsequently weighted to reflect the known universe profile.
A sample size of 350 yields a dataset which can be deemed to be accurate to
within plus or minus five percentage points.
Known
Profile
(Bill Moss)
B & A
Business
Monitor
Sample
B & A
Weighted
Results
4
Sampling Approach
Interviewing was conducted through Behaviour & Attitudes Computer Aided Telephone
Interviewing Unit (CATI) at Milltown House in Dublin.
Interviews were conducted with the owner/Chief Executive of each selected company.
Fieldwork on the project was conducted between the 8th – 22nd March 2012.
All interviewing was centrally supervised and quality control verification was conducted
on 15% of interviews undertaken.
5
Detailed Survey Results
6
Higher
The Same
Lower
Business Activity Looking back – short term analysis
compared with equivalent period last year
2331
23
26
53
43
1st
Qtr 2011
Vs
1st
Qtr 2010
(353)
%
Gap (Pos vs Neg) -30 -12
Q.1 Business activity may be measured by gross income, chargeable hours worked or any equivalent measure of volume of activity appropriate in
your business. How has your business performed in the first quarter of this year – from Jan to March. Were your results higher, lower or the
same compared to the same period last year?
Is this the first sign of a shift in direction? Here we can see while business is still operating in negative territory, it is improving.
1st
Qtr 2012
Vs
1st
Qtr 2011
(353)
%
7
Higher
The Same
Lower
Business Activity – Looking back - 1st quarters comparedBase: n = 353
31
20 19 17
38 3540
26
2127
19
27 30 23
43
5953
64
35 35 37
All Business
(353)
%
Gap (Pos vs Neg) -12 -39 -34 -47 +3 = +3
The data suggests that smaller companies are continuing to find it a tougher challenge
to turn their business around.
1 – 3
(148) (128)
%
Number of Employees
2011 2012 2011 2012 2011 20122012
4 – 9
(91) (87)
%
10+
(114) (138)
%
8
Higher
The Same
Lower
Business Activity – Looking back - 1st quarters comparedBase: n = 353
2227 28
39
24
27 23
20
5445 48
41
Gap (Pos vs Neg) -32 -18 -20 -2
As we hear in the media, those in the exporting world are faring considerably better and while it is
not plain sailing have turned things around much faster than their indigenous only counterparts.
Notwithstanding that, it is encouraging to see some improvements across the board.
Indigenous
Only(247) (248)
%
Any Export(97) (95)
%2011 2012 2011 2012
9
2833
3432
38 35
Higher
The Same
Lower
Business Activity Looking Forward to 2nd qtr
Looking ahead
to 2nd
Qtr 2011
vs
2nd
Qtr 2010
(353)
%
Q.4 And thinking ahead to the second quarter – April to June – do you think your performance will be higher, lower or the same as the second
quarter of 2011?
Gap (Pos vs Neg) -10 +2
As business looks forward, expected progress is more muted. Still it finally seem to
have reached the bottom!
Looking ahead
to 2nd
Qtr 2012
vs
2nd
Qtr 2011
(353)
%Expect business levels to be ..
10
Higher
The Same
Lower
Business Activity Looking Forward to 2nd qtr
2327 26
34 3640
35 26 32
4334
32
4246
42
2330 28
Gap (Pos vs Neg) -19 -19 -16 +11 +6 +12
Very small businesses are clearly struggling most to regain confidence levels and
business.
1st
Qtr 2011
(148)
%
Number of Employees 1-3
1st
Qtr 2011
(91)
%
4-91
stQtr 2011
(114)
%
10+1
stQtr 2012
(128)
%
1st
Qtr 2012
(87)
%
1st
Qtr 2012
(138)
%Expect business
levels to be ..
11
2630
3638
3632
29
25
38 38 3627
Higher
The Same
Lower
Business Activity Looking Forward to 2nd qtr
1st
Qtr 2011
(97)
%
Any Export
1st
Qtr 2011
(247)
%
Indigenous Only
Gap (Pos vs Neg) -12 -8 = +11
1st
Qtr 2012
(248)
%
1st
Qtr 2012
(97)
%
Those with Exports in the mix have begun to turn the corner
Expect business
levels to be ..
12
Optimism?
13
Business Environment – Optimism for 2011/2012 as a
whole?
1521
59 45
2634
Average 2011
(1026)
%
Very optimistic
(8-10)
Neutral/Not sure
(4-7)
Very worried (1-3)
Q.5 And looking forward to the remainder of 2012, how optimistic are you for a favourable business environment by end December
2012. Lets use a scale of 1-10 where 10 means you are very positive about prospects and 1 means that you are very
concerned or worried. On this scale, how optimistic are you?
March 2012
(353)
%
Gap (Opt vs worried) -11 -13
For 2012 as a whole, there
continue to be more worried
business owners than optimistic
ones. This may change if their
more positive expectations
about the next quarter are
realised.
14
Employment
levels
15
Employment Levels Compared to Last Year
010 12
5962
3126
Higher
The same
Lower
Gap (Pos vs Neg) -21 -14
Net employment is still negative, albeit it continues to ease.
Q. 7 Could you indicate whether your employments levels are higher, lower or the same compared with the first quarter of last year?
1st
Qtr 2011
Vs
1st
Qtr 2010
(353)
%
1st
Qtr 2012
Vs
1st
Qtr 2011
(353)
%
16
Prices and profits
17
Operational Profit – Year on Year
19 22
2527
5652
Higher
The same
Lower
Over 50% of companies report lower levels of profit than last year – so many have been on a
negative trajectory for at least two years. Still there appears to be some minor improvement
– or at least a sign of a shift in direction suggesting we may be reaching the bottom.
Gap (Pos vs Neg) -37 -28
Q.8 Could you tell us whether operational profit is higher, lower or the same compared with the first quarter of last year?
1st
Qtr 2011
Vs
1st
Qtr 2010
(353)
%
1st
Qtr 2012
Vs
1st
Qtr 2011
(353)
%
18
Prices Charged – All Businesses
9 13
4650
4543
Higher
The same
Lower
Evidence of some minor shift in direction. It does appear as if there is a long way to go
on the pricing front.
Gap (Pos vs Neg) -36 -30
Q.9 Could you tell us whether prices charged are higher, lower or the same compared with the first quarter of last year?
1st
Qtr 2011
Vs
1st
Qtr 2010
(353)
%
1st
Qtr 2012
Vs
1st
Qtr 2011
(353)
%
19
51
29
19
19
17
14
13
12
13
8
6
48
26
11
20
15
13
14
8
10
13
5
11
That we keep sales/business coming in
That we keep costs to a minimum
Survive/stay in busness
That we have sufficient working capital
Retain/take on more staff
Maintain/increase profit margins
Attract new customers
Improve/maintain quality of products/service
Manage to get the finance we need to grow the business
Develop new areas of business/growth/expansion
Increased/better marketing
Better customer service
2011
2012
Business Priorities for 2011/2012 - 1st quarters
compared – Spontaneous ResponsesBase: n = 353
%
Q. As you face the remainder of 2012, what are your key priorities? DO NOT PROMPT
(All other answers less than 5%)
Much the same issues as last year
although businesses may be moving
towards finding new types of customers
and encouragingly fewer are solely
concerned about survival.
20
Summary of key findings
21
Behaviour & Attitudes Business MonitorSummary of Main Findings
Business Confidence:
The current business confidence monitor reveals that the distinctly tough business
environment that has endured during 2011 has eased slightly in the first quarter of
2012.
Given that Ireland is arguably in its fifth year of recession, this slight upward swing
for businesses in Ireland and their prospects for short/medium term growth will be
welcomed.
Still, the majority (43%) of all companies have seen lower levels of business activity
in the first quarter by comparison with the same period in 2011. This trend of lower
activity persisted across 2011. In the final quarter of 2011, one anticipated that the
‘floor’ had been reached. The current tracking period suggests that it has.
Only 31% of companies have seen an improvement in their activity compared with
this time last year. 26% indicate that their activity level has remained the same
against the benchmark period (Q1 2011) while the balance are performing less well.
Taking everything into consideration, while businesses remain in negative equity (so
to speak), at least the outlook is less negative than it was for the same period last
year.
22
Behaviour & Attitudes Business MonitorSummary of Main Findings
Business Confidence:
Looking ahead to the second quarter, two thirds of Irish businesses believe that their
company performance in Q2 of 2012 will be at a similar level (32%) or worse (35%)
than for the same period of 2011.
Among companies that are exporting (exclusively and in combination), first and
projected second quarter business levels show a definite improvement compared
with last year.
This is good news as an export driven growth is a key cornerstone of current
economic policy.
Perceptions of the prospects of the Irish business environment as we closed the year
out, as a whole, are cautious. 45% of all companies are unsure of how to gauge the
business environment. 34% are concerned while only 21% are optimistic.
As such, while there is evidence of a reason to be more positive about the business
environment, confidence in the year as whole remains cautious.
23
Behaviour & Attitudes Business MonitorSummary of Main Findings
Employment
Employment has marginally increased for companies this quarter in comparison to Q1
2011. Still the net impact remains negative, with more companies having less staff
when compared with the equivalent period for 2011.
While the overall impact is continued shrinkage of employees at a macro level, at
least it would appear as if the rate of decline is slowing down.
Pricing
Pricing structures remain under significant pressure among Irish companies, with 43%
of companies now selling at lower prices than for the same period last year and a
further 50% of companies working to the same price level.
Essentially we can see that margin reduction (a key element of employment
reduction) had remained a constant into the fifth year of a recession.
24
Behaviour & Attitudes Business MonitorSummary of Main Findings
Profits:
The only positive, and a narrow positive at that, is that the negative trend in
reduced operational profit is lower than for Qtr 1 2011
Still over half of companies (52%) are recording lower operating profit in Q1 2012
than in Q1 2011. These declines are on the back of similar levels of decline in 2011.
25
Thank you
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