Business leaders are less hopeful than the year ahead than they were at the end of 2021, but more than half believe their company's financial performance will improve next year, the Institute of Directors (IoD) has found.
The 54% that believe their firm's finances will improve in 2023 compares to 77% at the end of last year, with 33% saying they are less optimistic, up from 14% in Q4 2021, and 13% who said they didn't know.
Just 15% of business leaders are now 'more optimistic' about the economy now than in the third quarter. while 42% said they are 'more pessimistic,' and 43% reported no change in sentiment.
Pessimism is greater for the short-term as 44% said they don't believe their organisation's financial performance will improve in Q1 2023 compared to 43% who do and 13% who said they don't know.
In terms of risks, geopolitical and economic instability were identified as the biggest challenges to business (25%) ahead of inflation (15%) and labour sourcing/quality/capability/retention (13%).
“While business leaders were more hopeful last year for the year ahead than currently, signs of confidence remain," said Caroline Spillane, CEO of the IoD in Ireland.
"Just over one-in-two business leaders are hopeful that the financial performance of their primary organisation will improve in 2023, so there is still room for optimism. Business continuity plans were the saving grace of many businesses when Covid-19 hit.
"As we remain in unpredictable times, I would recommend that all business leaders review and assess their business continuity plans to ensure they are future proofed."
There are some positives for the government in the IoD report, too. The findings reveal the government’s performance is seen by a majority of business leaders (58%) as positively impacting consumer confidence.
It also reveals that 49% of business leaders see the government performance as positively impacting business decision-making.
The survey was completed by 307 business leaders between 25 October and 14 December. In addition, 68% of the respondents are directors, including 30% who are CEOs, with the majority of the remainder in senior executive roles.
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