More than three quarters of Irish firms surveyed recently said they had experienced "minimal impact" from the terrorist attacks on the US on September 11th.
Just 19 per cent said they had felt an impact, either through a decline in turnover or by having to cut back on planned investment or job creation. Meanwhile, 78 per cent reported little effect from the attacks, according to the latest Irish Times/Ulster Bank Business survey.
"The economy was slowing sharply anyway, so it is not unexpected that at this early stage there is little evidence of an additional impact from recent events in the US, except perhaps in the services sector where up to a quarter of respondents reveal cutbacks in planned investments and job creation," said Ulster Bank's head of economic research, Mr Pat McArdle.
However, businesspeople fear the bulk of the impact has yet to materialise. They expect the events in the US to impact severely on certain sectors, with 97 per cent of those surveyed saying tourism would be "affected a lot" while 85 per cent said the same of the travel sector.
Firms also fear cutbacks in US investment, with 57 per cent forecasting a major impact on US multinational investment, while a further 33 per cent expect some decline. A third anticipates housing will be affected a lot, with 53 per cent expecting some effect on this sector of the economy.
The survey also found that just 26 per cent of firms surveyed had a disaster plan in place, which would allow them to continue operating in the event of a disaster occurring in the Republic or a neighbouring country.
Asked how the next Budget should be framed, 41 per cent said the Government should increase spending on health, 32 per cent said it should introduce emergency measures to stimulate business while 24 per cent said it should continue to lower tax rates.
Questioned on the impact of lower interest rates on business, 53 per cent said they would have a marginally positive impact, 14 per cent expect a significantly positive impact while a third anticipated little or no impact.
"This is, perhaps, not unsurprising in the light of the generally low level of interest rates that we have now become accustomed to," Mr McArdle said. He also noted that it takes up to a year for the impact of rate reductions to be fully felt.
Of those surveyed, half expect stock markets to drift sideways from here, 27 per cent expect a rally while 19 per cent believe markets will fall further.
On the fate of the dollar against the euro, most respondents hedged their bets. A gradual fall was forecast by 40 per cent, while 36 per cent expect the rate to remain largely unchanged.
The survey was carried out on September 28th and October 1st among a sample of 100 Irish firms with more than 20 employees.
