AS the Brexit vote approaches, both sides of the debate are digging deep to sway public opinion as well as that of business owners and investors on a national and international scale.
The arrival in the UK of the US President last week, and the anticipated media circus that followed, did not disappoint the 'stay' camp - and equally entertaining was the reaction to it of 'leave' lead campaigner Boris Johnson.
Few would disagree that the real Brexit mud-slinging is well under way and, in terms of
commercial property activity, the pause button has truly been pushed as a result. The
uncertainty over the outcome of the vote has investors, developers and bankers sitting on
their hands until the dye of the referendum is cast and the result announced.
Much has been made of the Brexit vote, and rightly so, with arguments for and against being backed by significant business, political and economic figures. But Brexit is not the only hot topic that will have significant upcoming effects on the commercial property market - and some of the other factors at play would likely be headline news if Boris and Barack weren't above the fold.
As we hear world leaders talk of trade agreements, global markets and the effects of a
Brexit, there is little heard about the knock-on effect, on industry in the UK, of the most significant decrease in oil and commodity prices since the global economic downturn in 2008. It’s just not featuring particularly highly on the news agenda.
We all love the fact that our petrol, diesel and home heating oil prices have reduced but forget the consequent effect on our local industry. Over 40 per cent of the world's screening and crushing equipment is designed and manufactured in Northern Ireland.
As a supplier to the global market, a significant amount of this plant is used for the extraction and refinement of oil and the exploration, delivery and production of other similar commodities.
It stands to reason that lower commodity prices result in lower profits for the companies that provide them and this directly impacts their ability to invest in future operations. This ripple effect, the waves of which are just starting to lap up to the shores of the Northern Irish industrial sector, is that the demand side for our local output to these sectors has been reducing rapidly.
It remains to be seen if this headwind for manufacturers will be sustained or strengthened by the price of Crude staying at its current level or dropping further. Those down the food chain who supply commodity industries, including the oil industry, would welcome an increase in prices regardless of the effect on the punter on the street.
And therein lies the problem. It may be difficult for the man or woman in the street to swallow, but for the Northern Ireland industrial sector extra pennies at the pump and increasing commodity costs equate to extra pounds in the bank, and a sustainable future, for that man or woman in the street’s employer.
Only time will tell - and the settling of the Brexit debate one way or the other will mean the record can start playing again. However, whatever the outcome, the price of oil and other commodities, and their effect on the Northern Ireland industrial market, will be at least a verse in the song - and possibly the chorus - regardless of the result of the EU referendum.
:: Declan Flynn is managing director with Belfast-based commercial property agency Lisney
