Business

Over to Stormont - but can they fix it?

Announcing finds of the latest quarterly survey are (from left) Christopher Morrow (NI Chamber), Brian Murphy (BDO) Ann McGregor (NI Chamber) and Maureen O’Reilly (economist)
Gary McDonald Business Editor

BUSINESSES are urging the newly-revived Stormont Executive to "act immediately" to reinvigorate the north's stagnant economy amid fears the region could tip into recession.

The "starkly negative" impact of the collapse of power sharing must be "quickly reversed", respondents to the NI Chamber of Commerce's latest quarterly business barometer suggested.

But it came with the caveat that "there is no magic money tree", with Finance Minister Conor Murphy saying the British government's financial offer to get the institutions up and running again was "way short" of what was expected.

Some 173 businesses in the north (between them employing 16,500 people) contributed to the Chamber survey, though the findings were perhaps slightly skewed given that the responses were elicited prior to the December 12 general election and subsequent confirmation that Boris Johnson will take the UK out of the EU on January 31.

But the overwhelming view of businesses it that the north's economy remains weak, with a faltering services sector and listless manufacturing trading, with a broad-based slowdown across both.

Fewer businesses were trying to recruit in the last three months of 2019 (46 per cent compared to 60 in quarter three), while business confidence remains particularly fragile.

The results also suggest that delaying Brexit until January 31 has had a negative effect on a third of businesses (32 per cent), who say it has had an impact on investment and growth plans.

Around 36 per cent view the current ‘Boris’ deal as detrimental to business prospects, twice the share of those that believe that this deal will boost business prospects.

And looking ahead, 57 per cent of respondents believe the Northern Ireland economy will contract in 2020 and they enter the year less optimistic than other years.

“These findings clearly underline that Northern Ireland’s trade performance remains poor,” according to NI Chamber chief executive Ann McGregor.

“Sales in the domestic market are weak and order balances are negative. Business investment has taken a particular hit over the last few years and that will have consequences for the growth and competitiveness of our economy going forward. Cash-flow problems persist, as do recruitment difficulties.

“Given recent trading conditions, these results are unfortunately not surprising. They are confirmation of the starkly negative impact three years of paralysis at Stormont and continuing Brexit uncertainty had and continues to have, on companies.

“While businesses are more positive about their own prospects for growth in 2020 compared to the wider economy, despite best efforts, their plans are weighed down by these external factors.”

And she stressed: “There needs to be immediate, substantial action to reinvigorate our stagnant economy, build new infrastructure, boost skills and lower the cost of doing business in 2020.”

Brian Murphy, managing partner at BDO NI, who partner in the survey, added: “In order for businesses to achieve aspirations similar to what they were in 2016, a number of long-standing issues need to be addressed - low levels of confidence fuelled by uncertainty, rising business costs and the skills gap, along with Brexit topping yet another survey wish list.

“With the Executive now back, the prospect of a Tourism Strategy, Skills Strategy and long-term multi-year budgets will provide much needed confidence and clarity for industry.”

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Business