Northern Ireland economy remains on back foot says Chamber survey

LOCKED DOWN BELFAST: Businesses says rising coronavirus infections and lockdown controls will weigh heavily on the economy in the coming months. Picture: Hugh Russell
Gary McDonald Business Editor

THE north's beleaguered economy is starting 2021 on the back foot after yet another business barometer revealed how tough trading conditions hit confidence and knocked back investment intentions.

And rising coronavirus infections and lockdown controls will weigh heavily on the economy in the opening months of the year, before enough people can receive the vaccine and restrictions can be relaxed.

But in the meantime there will be devastating collateral damage, with one in five businesses unlikely to be around to see those brighter summer days.

The latest quarterly economic survey (QES) from the NI Chamber of Commerce and BDO (data was harvested just before the two-week pre-Christmas circuit breaker) showed that 69 per cent of respondents believe 2021 prospects are poor and they expect the economy to contract.

Despite most key indicators in the survey improving in quarter four (albeit at a slower pace than the previous quarter), they remain negative, meaning more businesses continue to report worsening business conditions than those reporting improvements.

And the modest recovery actually slowed in Q4, with 49 per cent of businesses experiencing a fall in domestic sales in the previous three months while only 19 per cent saw an increase.

Among the other headline findings, more than a third of those interviewed (there responses from 200 Chamber members employing a total of 13,200 staff) plan to reduce capital investment in the months ahead while just 19 per cent are completely confident their business can survive in spite of changing policy interventions.

The Chamber/BDO study mirrors the grim findings in the Ulster Bank PMI report published on Monday, while this morning sees Danske Bank publish its economic predictions, will are expected to follow a similar downbeat trend.

NI Chamber chief executive Ann McGregor said: “Businesses continue to face challenges on an unprecedented scale, and if these findings are the foundations for trade in 2021, then another tough year lies ahead.

“It's clear that business needs a clear support package from government for the whole of this year, not just another incremental intervention, because the current drip-feed approach to business support measures is too short term.”

On findings on Brexit in the QES she added: “Our members have continually raised concerns around the practical implications of the UK’s transition out of the EU, including our future trading relationship with Great Britain.

“Our concern is that the survey suggests that the pandemic has already taken its toll on how Northern Ireland trades externally and with the added complexities brought about by EU transition, that trade outside the region could be deeply impacted.

“We need consistent, timely and practical advice on a real-time basis to make sure trade is uninterrupted as far as possible and where there are issues and concerns, that they can be raised and dealt with urgently.”

BDO regional managing partner Brian Murphy added: “How society, as well as the business community, responds to this latest lockdown will play a key role for our overall prospects in 2021.

“But he business community has been through a lot in Northern Ireland and is resilient, so we ask that the Executive continues to listen to what they have to say.”

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