Brexit: Northern Ireland business confidence could be 'shattered' as UK votes to exit EU
Business confidence in Northern Ireland could be “shattered” by the UK’s decision to leave the European Union, putting thousands of jobs at risk, it’s been claimed.
Some of Northern Ireland’s biggest employers in its most important sectors – including poultry giant Moy Park, financial services firm Citigroup and aerospace giant Bombardier — had expressed fears about the impact on their business of Brexit.
Sterling today experienced its biggest one day fall in 30 years, and £100bn was wiped from the FTSE.
Bombardier, which employs nearly 5,000 people in Northern Ireland and was behind the province's biggest ever inward investment project, said: "It is too early to speculate on potential outcomes/impacts of the UK now having voted to leave the EU. As always, we are committed to our businesses, all our employees and our customers in the UK, and we will continue to work with the Government and other industry stakeholders to create the necessary business environment to ensure our future success."
Bank of England governor Mark Carney this morning said volatility “can be expected” in the wake of the Brexit vote but said the Bank is prepared to provide £250bn to support markets.
“As a backstop, and to support the functioning of markets, the Bank of England stands ready to provide more than £250bn of additional funds through its normal facilities.”
But for now, it’s officially business as usual, as two years of negotiations will take place over the process of withdrawing from the EU.
But Ulster Bank chief economist Richard Ramsey said growth in the UK economy was likely to halve to below 1% next year — with growth in Northern Ireland likely to be even lower.
And IHS Global Insight said that is “substantially cutting” its GDP growth forecasts to 1.5% from 2% for 2016 and to 0.2% from 2.4% for 2017.
Max Mackin, owner of recruitment firm Reactive Recruitment, said he feared large numbers of redundancies could result as businesses watch how the UK economy rebounds from the shock of the Brexit vote.
He said: “The EU referendum caused a lot of companies here to hold back on their recruitment needs and probably caused businesses to lose out on potential revenue.
“Now that the vote is over... we could see a number of redundancies amid panic and a shattering of business confidence.
“We’ve heard rumblings of large employers such as Citigroup say they will pull out of Belfast if we left the EU, so this is a very worrying situation. We anticipate thousands of jobs in Northern Ireland could be at risk as a result of the referendum.
First Minister Arlene Foster — who backed the Brexit side of the debate — said the vote was “a good result for the UK, for our nation state”.
And in the Republic, Liam Lynch of Chartered Accountants Ireland said its government should play an active role in negotiations so that cross-border trade was not put at risk.
The CAI president said: “The Irish government must now ensure that the terms of the UK’s exit do not lead to unnecessary burdens and tariffs particularly on Northern Ireland businesses trading with the rest of Europe.” ”
CBI Northern Ireland director Nigel Smyth — who backed the Remain campaign — said: “The British people’s vote to leave the EU is a momentous turning point in our history. The country has spoken and it’s for us all to listen.
“Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt.
“The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy.
“The choices we make over the coming months will affect generations to come. This is not a time for rushed decisions.
“The CBI will be consulting its members and business is committed to working with Government to shape the best possible conditions for future prosperity.”
IoD chairman Alan Taylor said three quarters of its membership had voted in favour of staying in the EU.
But now that the vote has taken place, “it is now up to our political leaders to negotiate a deal with European leaders which preserves the ability of firms here and across the UK to trade easily with the remaining member states”.
“One thing the UK Government must do is to guarantee the right to remain of EU citizens currently working in the UK. Many companies in Northern Ireland have EU nationals employed in key roles and do not want the disruption of losing valued staff.”
Alastair Hamilton, chief executive of Invest NI, said: "All of the factors which have made Northern Ireland a good place to start and grow a business, including our attractiveness as a location for investment, a base for research and development and as a trading partner, remain and will continue to provide the foundations upon which to grow our economy in the future.
"As part of the fifth largest economy in the world, we are confident that Northern Ireland will continue to succeed as an attractive location for inward investment, in particular from our largest target market, the USA; and that the reduction in corporation tax will play an invaluable role in creating a business-friendly environment to support job creation, based on the combination of tax, talent and value.
"As the EU sells more to the UK than we do to them, we are positive that mutually beneficial trading arrangements will ensure continued access to the EU market, whilst also having the freedom to develop new bi-lateral agreements in emerging markets and other geographies.
"Ultimately, Invest NI will continue to offer and deliver the fullest range of support to both local and internationally owned businesses to drive economic growth. We will also fully explore all potential new opportunities that may emerge following the referendum result.
"This is the message that I will take to the USA next week as I meet with potential new investors."