Brexit impacting on growth of north's resilient manufacturing sector

Pictured at the launch of the third State of Northern Ireland Manufacturing 2019 Survey are: Stephen Kelly, CEO, Manufacturing NI ; Maureen Treacy, Perceptive Insight; and James Donnelly, Tughans head of corporate.
Gareth McKeown

GROWTH within the north's manufacturing sector is slowing in the face of ongoing political uncertainty, a new report shows.

In line with other recent economic publications, the latest Manufacturing NI and Tughans survey highlights a resilient industry performing in a challenging environment.

Chief among the local concerns raised is Brexit, with three quarters (76 per cent) of businesses citing the associated uncertainty as their biggest issue, an increase on the December survey (68 per cent).

The latest survey shows that Brexit anxiety is growing, with three in five manufacturers now of the belief it will have a negative impact on business, compared to half only six months ago.

As a result 45 per cent of those surveyed have admitted to stockpiling in anticipation of Brexit-related disruption. This compares to just 16 per cent of manufacturers in December.

Behind Brexit, the long-term absence of devolved government is another major issue, referenced by over two thirds (69 per cent) of those surveyed.

The cost of doing business in Northern Ireland and recruitment problems were also noted by manufacturers as issues of ongoing concern.

In spite of the clear discontent, the sector as a whole remains in relatively good health with two-thirds (67 per cent) of businesses describing themselves as in a position of growth, albeit the figure is less than the 80 per cent recorded in December. In relation to profits the picture is also rosey, with 87 per cent describing their business as in the black over the past 12 months.

Looking to the year ahead and manufacturers are planning ongoing investment, most notably in R&D (65 per cent), but crucially investment intentions are more subdued compared to December.

Stephen Kelly, chief executive of Manufacturing NI believes the latest survey results highlight worrying trends within the sector.

"Of concern is that confidence is declining due to political uncertainty, particularly in regard to the UK's exit from the EU," he said.

“Manufacturers are creative, brave and resilient. They find a way to resolve problems, but it is now clear that issues outside of their control are beginning to bite. We need leadership in Stormont and at Westminster who will take the right decisions in the coming months to protect them and the jobs which rely on their businesses.”

James Donnelly, head of corporate, Tughans added:

“Although not quite so positive as the December 2018 survey, the survey findings indicate that most manufacturing businesses locally are remaining optimistic. This is encouraging despite the ongoing challenges presented by political uncertainty, the rising cost of doing business and the shortage of appropriate skills. Whilst the sector has embraced a stoical approach of just getting on with it, there is no doubt that if our local politicians could resolve the impasse that the local economy would benefit hugely.”

The Manufacturing NI and Tughans manufacturing survey was conducted by Perceptive Insight over a three-week period in May and June. A total of 139 businesses from across the north made up the survey, including those employing over 1000 staff.

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