Calls for 'business revival fund' as scale of economic slump is laid bare
THE scale of the immense damage to business Northern Ireland has been laid bare in a survey which reveals not just the fastest and deepest collapse of sentiment on record, but which are potentially threatening to dampen investors’ appetite to invest in the region.
And the report's authors, in an ambitious wish-list, have called for a Westminster-led 'business revival fund' which firms can use in any way they need to increase productivity to deal with the fall out of the Covid-19 crisis.
The findings of the NI Chamber of Commerce's latest Quarterly Economic Survey (QES), held in association with BDO, are catastrophic, with every economic indicator around domestic sales, exports, jobs, cash flow, business confidence and investment intentions plummeting to an all-time low - worse even that the immediate aftermath of the 2008/09 financial crash.
Some 296 Chamber member companies, between them accounting for around 32,500 jobs, responded to the QES, with the fieldwork taking place over a fortnight straddling late May/early June, when the lockdown had taken a vice-like grip.
It showed seismic slumps in both short- and long-term indicators - "a sea of downwards red arrows" as economist Maureen O'Reilly, who carried out the analysis, labelled it.
"Given that the Northern Ireland economy was weaker going into Covid that it was going into the financial crash of 2008/09, these findings don't bode well," she warned.
Among the key findings directly due to Covid:
- Staffing - 77 per cent have furloughed workers while 12 per cent have made redundancies, and more than half (52 per cent) say they intend to cut staff.
- Prospects - 70 per cent expect business prospects to decline (for 34 per cent it will be a strong decline).
- Survival - One in five small businesses fear they'll have to close as a result of the pandemic.
NI Chamber chief executive Ann McGregor said: “The services sector has suffered particularly badly, with consumer-facing firms most acutely exposed to economic headwinds from the pandemic, while manufacturing has had a dismal three months, with collapsing demand and major disruption to supply chains.
“Businesses were already concerned about the impact of Brexit on the economy, and the pandemic has created in an entirely different context, with companies facing a ‘double whammy’ of Brexit and the Covid-19 fallout, placing a huge challenge on the business community in Northern Ireland.”
She has called for a business revival fund that firms can use to change products/services, invest in new
markets, introduce more sustainable practices, or invest in AI, as well as seeking a business focused reskilling/up-skilling programme working directly with the local business community to design and implement a range of supports that allows businesses to preserve and grow their workforce.