Irish companies are becoming increasingly concerned over the potential rise in costs this year, a new survey has found, with more than half saying costs would increase and almost a third expecting profits to decline.
The Huawei Digital Business Index found sentiment had reversed from the previously positive outlook, with companies adopting a more cautious approach to digital investment as the business environment becomes increasingly volatile.
While businesses remain positive, with the index at 56.3, it was down from 58.9 in the fourth quarter of 2024. There were also differences between smaller companies, which had a negative outlook on their digital spending 41.9, versus larger companies, which had a score of 66.6. But even the latter was lower, falling from 74.4.
The survey was carried out for Huawei by Amárach Research, questioning 350 decision makers from SMEs and larger firms across Ireland. It also looks at key performance indicators for businesses throughout the country.
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“The results from the Index show that we should be concerned about the potential rise in costs leading to reduction in profits. Investment plans will weaken further this year, which will have a knock-on effect on productivity and, ultimately, on economic growth”, noted Gerard O’Neill, chairman, Amárach Research
The survey found that also companies were continuing to spend on smart energy solutions and IT hardware, other areas such as electric transport and IT training were seeing a fall-off in interest.
However, AI adoption continues to grow, as companies integrate generative AI for content creation, internal operations, and data analysis.
Huawei Ireland chief executive Calvin Lan said it was important for Irish businesses to keep investing in digital technologies if they wanted to remain competitive.
“By embracing AI, smart energy solutions, and other digital advancements, companies can significantly enhance productivity and operational efficiency,” he said.
“Ireland’s commitment to developing its national digital infrastructure is not just an investment in technology, but an investment in its future competitiveness and economic resilience. As we navigate these uncertain times, let’s remember that digital transformation is key to unlocking new opportunities and driving sustainable growth.”
