A new report from PwC warns that private businesses have faced intense pressures in Ireland over the past few years and more Government supports are needed.
Ireland has dropped slightly as a place for private businesses to thrive, according to a ranking of EMEA countries by PwC.
The company’s EMEA Private Business Attractiveness Index ranks countries based on various categories such as macroeconomics, education, the tax environment, talent and technology infrastructure.
Ireland was ranked 14th out of 33 EMEA countries in 2021, but managed to rapidly rise up to seventh place in 2022 – largely thanks to its GDP growth and start-up ecosystem. But the latest 2023 index ranks Ireland in ninth place, a drop of two places in one year.
Switzerland retained the top spot for three years in a row, while Sweden, Germany and the Netherlands took the second, third and fourth spots respectively.
One of the most significant drops for Ireland was in macroeconomics – a spot where the country ranked first for two years in a row. But the latest index saw Ireland fall to sixth place. PwC attributed this drop to the cost of living crisis, along with cost increases being felt strongly during 2023 in the private business sector.
PwC Private partner Colm O’Callaghan said Ireland’s overall ranking drop reflects the “intense pressure” that some private businesses are under and the need for “continued supports for this important sector of our economy”.
“Over the last few years, private businesses had to deal with the pandemic, then a period of steep inflation, high interest rates, electricity price increases and other cost pressures often while working with restrained cash flows,” O’Callaghan said.
Ireland had some improvements in the index however, as it went up slightly in the ‘start-up ecosystem’ ranking. Ireland also improved its ranking to ninth place for ‘education, skills and talent’, up from 12th place in 2022.
PwC Private partner Nicola Quinn said Ireland needs to take a “whole of Government approach” to attracting and retaining private business.
“We need to continue to prioritise supports to help these businesses meet the increased costs of doing business in Ireland,” Quinn said. “We also need to look at additional tax incentives to encourage digital transformation, investment in SMEs and energy transition.
“We welcome the Government consultation on simplifying Ireland’s business tax regime and it is vital that measures to implement this are brought forward in the next Budget.”
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