Should Irish businesses be worried about what is happening on financial markets? Sometimes share prices go through ups and downs with little apparent link to the real economy. Yet talking to several market and business figures over the past week it is clear that all the talk of international risks is leading to questions about the implications for us.

Ironically, this is happening as some of the clearest evidence yet emerges of the economic progress here.

Figures last week from the Central Statistics Office showed that disposable incomes have risen more than 8.5 per cent over the past year, helped by rising employment levels and wages.

In turn this is boosting consumer sentiment, now at a 10-year high according to the KBC/ESRI index. Households are finally spending more. Businesses relying on the home market will belatedly have felt some solid ground under their feet in the last year or so.

And some international trends continue to play in our favour.

Oil prices

Lower oil prices are a plus for businesses and consumers here – with prices at the pumps falling again this weekend – and the day when interest rates are set to rise is disappearing further and further into the future mists.What’s not to like?

If you pull back from it you can say that the ups and downs of markets themselves may have a limited impact on most businesses. The market wobbles of 2011 – and the bout of nerves last summer – were both quickly forgotten.

But the economic trends causing the current upheavals bear watching. And one of the key factors is what is now happening in the US and UK economies. Both led the recovery in the developed world, and have been a vital support for Irish exporters and, in the case of the US, a vital provider of inward investment.

There are now concerns that these two big economies could be stuttering – the latest US retail sales figures, for example, showed a weak end to the year and a 2.1 per cent annual growth rate which was the lowest since 2009. This sent Wall Street sharply lower again on Friday.

Unless the figures turn more positive it will leave the US Federal Reserve board in a real bind as it decides when to raise US rates again.

Weak indicators and low inflation in the UK, meanwhile, have pushed back expectations of when interest rates there may start to rise and sent sterling sharply lower, in itself bad news for Irish exporters.

So the concern for Irish businesses is twofold.

One is the risk of lower growth if a China-led international slowdown does take hold.

The other related fear is some kind of market-driven crisis of confidence which hits international investment and growth, most likely to emerge via the financial pressure facing emerging markets hit by the double whammy of the China slowdown and falling commodity prices.

For businesses here there is no sign of an immediate hit to our economy. Unless there is some major market turmoil the short-term outlook is fine, helped by low interest rates.

But there is the rather obvious point that if international growth is weaker than expected then this will, sooner or later, knock on here.

A period when the US and UK economies are growing and Europe remains relatively weak suits us as we have growing demand for exporters yet interest rates and the euro stay low.

Under pressure

More of the same would be fine. But if all the big markets slow together it is bound to have an impact here.

All the signs are that the markets are going to remain under pressure. Larry Fink, the head of the big investment fund Blackrock, said this weekend that there needed to be more “blood on the street”and that equity markets could lose another 10 per cent and oil could fall to $25 a barrel. This could all be a bit destabilising if it happened quickly, though Fink did feel that markets could thereafter head higher.

More headlines of collapsing markets could lie ahead. Those running businesses here will hope that this will pass. But boardrooms need to be alert to the risks.

A crucial few months lie ahead when data will show the impact internationally of what is happening in China. In parallel we will learn whether the Brexit vote will happen this year.

Businesses always face uncertainties and risks, but whatever about the ups and downs of share prices, the fears driving the markets need to be closely watched.