Confidence among small business owners and directors has fallen sharply since last year, with more than a third claiming to be less confident about the overall Irish business climate than they were last year.
Some 36 per cent of the owners, managing directors and directors of the 301 small firms questioned in November for the 02 Ireland business confidence survey said they were "less confident" about the forthcoming year than they were at the start of 2007.
Increased competition, managing costs and growing sales were the main challenges facing the small and medium-sized enterprises (SMEs).
The findings indicate that pessimism among Irish firms is more widespread than it was a year earlier in late 2006, when only 17 per cent of the firms surveyed said they were less confident about the year ahead.
The proportion of those who reported being "more confident" about the business climate has fallen from 29 per cent to 22 per cent.
However, the SMEs were bullish about their own prospects, with some 58 per cent of the firms surveyed saying they expected their sales or revenues to increase in 2008 compared to last year, with 10 per cent saying they expected a decrease.
"While the decline in the property market combined with global banking turmoil appears to be having an impact on overall sentiment, it is striking that Irish SMEs remain very confident about their own outlook for 2008," said O2 Ireland's head of corporate and business sales, Billy D'Arcy.
Reflecting the lower rate of employment growth expected nationally in 2008, fewer firms said they would increase their headcount this year, with 30 per cent saying they were likely to take on more staff, compared to 39 per cent last year.
Some 6 per cent of firms said they expected to shed staff this year, compared to 3 per cent who said the same thing last year.
However, 41 per cent of owners, managing directors and directors questioned said they found it difficult to find or hire staff, a slight increase on last year, while 17 per cent said they had outstanding vacancies at their companies.
Two-thirds of the SME owners and managers said they expected house prices to fall in 2008, and their personal investment choices were found to have shifted away from property as a result. There was a big jump in interest in pensions and equities among those questioned.
