NI Chamber calls for restoration of Executive as survey exposes deterioration of economy
ONE of the north’s biggest business organisations has called for the restoration of the Executive at Stormont after a new survey exposed a steady deterioration in economic conditions during 2022.
The Northern Ireland Chamber of Commerce and Industry said almost two-thirds of its members were operating below capacity in the third quarter amid “a perfect storm” of cost pressures.
The trade body has called for the establishment of a new energy taskforce after 77 per cent of businesses said they expect to raise prices over the next three months to cope with rising costs.
One-in-four businesses said their energy costs had increased by at least 50 per cent in the last quarter alone.
Conditions for the north’s manufacturing sector, which has outperformed the UK during the pandemic, have deteriorated significantly, with confidence around profitability plunging to levels on par with the 2008 financial crash.
And while 28 per cent of firms said they were still trading well in the third quarter, the survey pointed to a declining trend throughout the year.
The feedback was gathered by the business group before the UK Chancellor’s mini budget of September 23, which has plunged the UK economic and political spheres into crisis.
Some 184 businesses, together employing around 33,000, people took part in the survey.
Brian Murphy, managing partner at BDO, which produces the report with the NI Chamber, said the survey showed an economy and a market “in flux”.
The official measure of the Northern Ireland economy, the Composite Economic Index, revealed the north’s economy was officially in decline during the second quarter of the year.
Recent surveys have pointed to continuing economic contraction.
This week the Office of National Statistics said the UK economy shrank of 0.3 per cent in August.
“There is no doubt that some of the results are concerning, with; inflationary pressures, weakening of order books, a worsening cashflow position and labour availability all contributing to the challenges that businesses will face in the weeks and months ahead,” said Mr Murphy.
“The economy is persevering and has continued to avoid a free-fall. Going forward, we all need time to assess the full impact of the government’s support measures and the practical help this will bring, that will hopefully be evident in the next quarter.
“Above all, it is critical that inflationary pressures are addressed and we avoid a protracted and potentially harmful period of rising costs.”