Property consultants CBRE today released their 15th annual survey of the Top 1,000 CEOs in Ireland. According to the survey, 68% of respondents believe that the Irish economy will grow in 2013.
The largest proportion of respondents (53%) believe that the economy will grow by up to 1% next year while a further 15% are more optimistic, believing that a growth rate of between 1% and 2% is achievable. None of the Top 1,000 chief executives who responded believe that growth of more than 2% will be achieved in 2013. Almost one third of respondents expect the Irish economy to decline next year.
18% of respondents expect Eurozone base interest rates to fall slightly in 2013 while the largest proportion (64%) believe Eurozone rates will remain at current levels. 18% of respondents expect interest rates in the Eurozone to increase next year. In contrast, 47% of Ireland's chief executives believe that UK base interest rates will remain at current levels in 2013 while 53% expect US base interest rates to remain stable at current levels next year.
47% of respondents to CBRE's annual survey believe that the availability of bank funding for businesses and households will rise next year. A further 41% of respondents expect lending to remain at current levels next year while 12% expect bank funding to deteriorate further next year.
When asked what factor had the most negative impact on Irish economic performance in 2012, 30% of respondents identified 'uncertainty within the Eurozone' as the single biggest negative influence, while 28% of respondents identified 'uncertainty about the cost of future austerity measures including property tax, water metering etc'. A further 22% identified 'the domestic banking crisis' as being the biggest influencers on economic performance in 2012.
Compared with 12 months ago, 27% of Irish chief executives say they are more optimistic about Irish economic prospects in the short to medium term. A further 18% of respondents say they are less optimistic than they were 12 months ago.
The greatest proportion of respondents (55%) is neither more optimistic nor less optimistic than this time last year. 56% of respondents say they expect Ireland Inc. to be viewed more favorably in 12 months time from an international perspective. This compares with more than 80% this time last year. 35% of respondents expect no change in how Ireland is perceived internationally in 12 months time while 9% expect Ireland will be viewed less favorably this time next year.
More than 50% of respondents to CBRE's annual survey said they were more favorable towards property in Ireland than they were 12 months ago. Indeed, 68% of respondents say they are more favorable to residential property in Ireland than they were this time last year while almost 52% of respondents say they are more favorable towards Irish commercial property than 12 months ago.
According to Marie Hunt, Executive Director and Head of Research at CBRE, "59% of Irish CEOs who responded to our annual survey expect residential property values in Ireland to increase slightly over the next three years. A further 32% of respondents expect residential property values to remain stable at current levels over the next 3 years.
9% of the CEOs who responded to our survey expect a slight decrease in residential property values in the period with no respondents expecting residential property values to decline significantly over the next 3 years. In relation to commercial property, 59% of respondents expect Irish commercial property values to remain stable over the next 3 years. 26% say they expect commercial property values in Ireland to increase slightly over the next three year timeframe. Meanwhile, 15% expect commercial property values to decrease significantly over the next 3 years".
When asked what sector of the commercial property market they expected to perform best over the next three years, more than three quarters of Irish chief executives identified office property in Dublin as having the best prospects while the provincial retail