There’s enough lagging in the Northern Ireland economy to protect the nation’s water pipes from the most severe winter nature can throw at us.
This recovery, as in previous upturns, sees us struggling to get out of first gear while the rest of the UK economy seems to be picking up pace in at least third gear.
Economic output or gross |domestic product for the UK climbed nearly 2% in 2010 while we were lucky to notch up just 0.5% growth. Unemployment continues to rise and more people are likely to join the dole queue in the wake of the much-talked-about cut in public-sector jobs. The housing market has performed in a manner which stock-market traders somewhat morbidly refer to as a dead-cat bounce |(ie, it hasn’t). There’s no doubt the construction sector has been brave but the impending prospect of a cut in capital spend is akin to pulling the foundations out from under an already crumbling building.
But the beauty of traditionally trailing in the wake of other economies is the fact that we can look to them for our own future progress. If we are indeed merely lagging the UK and the rest of the world rather than falling behind, then we at least know there’s light at the end of the tunnel.
With global GDP climbing just shy of 5% in 2010 then surely if we batten down the hatches and hang on for a few months longer we’ll soon be enjoying a similar bounce? Don’t be daft.
Our economy finds itself operating amid a unique set of variables which even the most weather-beaten sailor would classify as the perfect storm if they were to occur at sea.
Firstly, the much talked about Government spending cuts. Trimming the excess from Northern Ireland’s bloated public sector would have been a difficult enough prospect at the height of the boom times in 2006/2007. In the current environment it’s akin to equipping a snow plough with slick tyres in December.
Secondly, the woes of our nearest neighbours. The austerity plan of Brian Cowen’s government is going to hurt both its consumers and businesses and, in turn, that’s going to have a negative impact on us. Two-fifths of our exports head across the border (that figure came from none other than David Cameron so it must be true) so it stands to reason that a Republic with less disposable income and a business sector wading through treacle will have significant knock-on effects up here. In fact, you might as well hitch up a trailer to that snow plough and weigh it down with 20 tons of well take your pick from the stockpiles of supplies in builder’s yards throughout the country.
So far, so doom laden. These two issues leave us in what you might call a tight spot, one which is going to take ingenuity and hard graft to get out of.
As luck would have it, the business people of Northern Ireland have swollen supplies of both of these qualities alongside a healthy dose of one other: experience.
Our troubled political past meant much of our economy was attempting to push water uphill with a sieve for many years and it wasn’t until the start of the last decade that |the boom years took hold.
That means that unlike other countries which had been enjoying relatively prosperous times for many years, we’ve plenty of people and businesses used to operating against strong headwinds. It might not sound like much but experience can account for a lot when it comes to making prudent decisions when the chips are down.
And it’s worth noting that in some sectors those chips could be used to soak up much of the public-sector cuts, quite literally. The Northern Ireland Food and Drink Association recently pointed out that the booming Northern Ireland agri-food sector could create 15,000 jobs in the next couple of years, negating the 15,000 jobs expected to be lost from the public sector.
Then there’s the IT sector which continues to blossom through a well-established propagation and education system. This has meant our home-grown businesses such as First Derivatives are managing to forge ahead while multinationals have us on their radar when it comes to setting up a European base. The global nature of the IT sector also means we can look to overcome lost exports to the Republic, something which some of |our manufacturers ing companies are already doing. Companies such as Shrader Electronics and Randox are reaching out across the world to global markets, particularly in the US, and finding the recovery is well and truly underway.
There are numerous examples of other companies prospering despite the economic headwinds and for many this theme of exporting is the key |to success. If we can ramp up our exports then we will be able to tap into the healthier economies of other regions and will be able to reduce the lag, one which may have insulated us from the worst of the global recession but one which is holding us back from a proper recovery. Now, more than ever, selling Northern Ireland’s products and services abroad is the key to driving the economy forward.