Irish business leaders have expressed concerns over the economic and legal outlook for 2024, according to our inaugural Business & Legal Sentiment survey. The survey, which had over 700 responses, revealed that 23% believe the Irish economy will decline and 45% believe it will see no growth by the end of 2024.
The data also highlights that the primary concerns for business leaders this year are staff recruitment and retention (27%), keeping pace with new regulations (26%) and business costs (24%).
In terms of regulatory compliance, the greatest hurdles identified are the sheer volume of regulatory change (33%), the complexity of the requirements (23%), and resource constraints (23%).
Our Managing Partner, Will Carmody, said: “The last 12 months have seen an increase in new legal regulations in the Irish market across a number of different industries, and it can be challenging for organisations to navigate this growing complexity and volume. Businesses are increasingly required to adapt their operations, reporting, and strategic planning to meet evolving regulatory standards. It is more important than ever for organisations to ensure they are informed and well-advised in this dynamic legal landscape.”
The survey also reveals how Irish business leaders perceive the impact of specific legislation. The impending Corporate Sustainability Reporting Directive and the Central Bank (Individual Accountability Framework) Amendment Act 2022 are expected to have the most significant impact on Irish business in 2024. However, less than half of respondents feel they are well-prepared for these pieces of legislation (42% said they were well-prepared for the CSRD, and 38% for the Central Bank (Individual Accountability Framework) Amendment Act).
The EU Artificial Intelligence Act is also highly anticipated and expected to pass into law this year. When asked about the main impact of this legislation on their business, the majority (42%) cited increased productivity, although a third of respondents (32%) said they feared greater risk exposure – reflecting a balance of optimism and caution in the market.
Impact of ESG Factors on Business Planning
89% of businesses said that ESG factors are influencing their business-planning and decision-making to a significant (39%) or moderate (50%) extent, suggesting a deepening commitment to sustainable practices and corporate responsibility.
Will Carmody commented: “These results highlight that sustainability and corporate social responsibility are no longer ancillary concerns but central to strategic planning and operational decision-making. The implementation of the Corporate Sustainability Reporting Directive (CSRD) in Ireland, expected by June 2024, is set to drastically change the sustainability reporting landscape. The high degree of attention given to ESG factors by Irish business leaders indicates a proactive approach in adapting to these upcoming regulatory changes. Encouragingly, the vast majority of respondents (87%) said they are confident their business has the capability and capacity required to meet the new ESG reporting standards.”
However, reflecting a more conservative stance in the current economic climate, more than 8 out of 10 leaders (82%) indicated they are steering clear of M&A activity in the upcoming year.
Additionally, six out of ten (60%) respondents believe that the OECD’s 15% tax rate will negatively impact the Irish economy, signalling concerns over Ireland’s future attractiveness for multinational corporations.
When it comes to resource allocation, more than 6 out of 10 businesses (61%) plan to increase spend on digital, continuing the digital transformation trend accelerated by Covid-19. In contrast, only 14% expect to increase resources in office space, reflecting the change in work patterns post-pandemic.
4 out of 10 respondents (43%) predicted average weekly office occupancy rates of 25-50% at their company by the end of 2024. 39% predicted 50-75%, while 1 in 10 said below 25%. Three quarters of business leaders (75%) also said they expected the price per square metre for commercial real estate to be lower by the end of the year.
Will Carmody said: “Although the majority of respondents to this survey don’t plan on M&A activity this year, many of our clients are seeing value in the market as interest rates level off and are engaging in strategic investments. We are more optimistic about the OECD 15% tax rate than respondents, but it will take a number of years for this impact to be clear.
Changes to the traditional workplace model, heavily influenced by flexible and remote working, have undoubtedly impacted on the commercial real estate sector. Businesses are now reimagining office spaces to be more adaptable, collaborative, and tech-enabled, fostering an atmosphere that is conducive to creativity and teamwork. This trend is reflected in the data around increased digital spend, highlighting a strategic alignment between physical space and digital capabilities."
Commenting on the results overall, Will Carmody added: “Our first Business & Legal Sentiment survey is intended to take the pulse of Irish business leaders at this moment, as they navigate a complex landscape characterised by economic uncertainty, evolving regulatory frameworks, and transformative technological shifts. Despite these challenges, there is a prevailing sense of cautious optimism for the future, underscored by strategic adaptability in areas ranging from digital transformation to ESG integration and a redefined approach to work patterns and the office space.”
Read more about our survey results in The Irish Times, Business Post (partially behind paywall), Business Plus, Irish Legal News and the Law Society Gazette. For more information and expert advice on how any of these topics may impact your organisation, don't hesitate to get in touch.