Brexit 'no deal' scenario could hit harder than we thought
THERE was understandable alarm in the business community at the latest analysis on Brexit reported last week which indicated that Northern Ireland's economy would be severely impacted by a ‘no deal' scenario.
Over the next 15 years, there would a 12 per cent hit to economic growth, according to a government report that was leaked.
This would be a dramatically slower rate of growth than we would likely otherwise see, something that would impact on businesses, consumers, public services, the labour market, and other aspects of our society.
Even if there was a free trade deal, the analysis predicts a hit to the Northern Ireland economy of 8 per cent over the same period, and 2.5 per cent in the event of the UK remaining in the single market.
At present, the Northern Ireland economy is performing relatively well, with 2017 having been a better year than many had anticipated. The latest Ulster University Economic Policy Centre outlook pointed to economic growth of around 1.4 per cent in Northern Ireland in 2017, and potentially around 1.2 per cent in 2018.
The latest Ulster Bank Northern Ireland PMI report also indicates that the private sector entered 2018 in healthy shape, with business activity rising and most sectors doing relatively well.
There are certainly economic challenges ahead, whatever happens with Brexit, including rising inflation, the likelihood that the Bank of England will raise interest rates, and the fact that consumers' incomes will be squeezed as a result.
But the ‘no deal' scenario presented by the government's analysis in which Northern Ireland's economic growth is hit by 12 per cent is something that everyone in Northern Ireland should be working to avoid.
This is one of the reasons why we need our Executive back in place as soon as possible – there may be a limited amount that a local administration could do to influence the direction of travel on Brexit. But we would no doubt be better served having an Executive in place and advocating for Northern Ireland's interests than not.
There are also things that are more within the control of a local Executive that need attention. We want to see an administration in place to ensure the delivery of long-term policies and decision-making that are vital to the development and growth of the economy. This includes investing in our infrastructure.
The latest RICS survey highlighted that growth in the construction and infrastructure markets was lacklustre at the end of 2017, with little rise in infrastructure activity taking place.
And this follows many quarters of falling or stagnant infrastructure workloads. With infrastructure investment such a crucial driver of economic activity and long-term competitiveness, this is something that we want to see being addressed.
Whilst the news about the government's Brexit analysis will have caused consternation in the business community, more encouraging were some of the noises emerging from the Stormont talks.
It has been suggested in some quarters that a deal is imminent, followed by the restoration of an Executive. We hope these sources are correct. It won't come a moment too soon.
:: Susan Mason is acting director of the Royal Institution of Chartered Surveyors (Rics) in Northern Ireland, the principal independent body representing professionals employed in the land, property and construction sectors. It represents more than 3,000 cross-sectoral members comprising of chartered and associate surveyors, trainees and students.