Belfast Telegraph

Wednesday 16 April 2014

Agri-food shines through Ulster's economic gloom

Ulster Bank lunch at the 2013 Balmoral Show - Lorna Robinson and Karen Loughran. Picture by Kelvin Boyes / Press Eye
Ulster Bank lunch at the 2013 Balmoral Show - Lorna Robinson and Karen Loughran. Picture by Kelvin Boyes / Press Eye

Northern Ireland's economy will not return to growth until next year or beyond, a survey of accountants said.

The region is still firmly in recession and becoming "disengaged" from any recovery in Great Britain, the report said.

Major issues affecting businesses confidence were lack of political stability, shortage of demand and difficulties in accessing finance, the Chartered Accountants Ulster Society added, warning uncertainty was holding back spending by consumers and investment by businesses.

Society chairman Darren McDowell said: "This survey shows that Northern Ireland's economic recovery has still some considerable way to go.

"Our members feel it may be 2014 or beyond before we see some positive growth.

"While there may be somewhat positive signs on IT, agriculture and for exporters, it looks as though the year ahead will continue to be challenging for local business."

Key findings of a survey of almost 400 accountants included:

• 56% viewed the prospects for Northern Ireland business in the year ahead as poor, with only 6% optimistic.

• 91% felt Northern Ireland was performing worse than the rest of the UK.

• 63% supported the creation of a single Department of the Economy.

• Half advocated an Invest NI dedicated small business unit and a quarter sought separate agencies for large and small firms.

Members recommended measures to stimulate the economy including increased capital spending, rates freezes for business and export initiatives.

Mr McDowell added: "A key concern is that our members feel that the Northern Ireland economy is still firmly in recession and that we are becoming disengaged from any recovery which may be taking place in the UK as a whole.

"There are significant levels of uncertainty about our economic future and this uncertainty is holding back spending by consumers and investment by businesses in Northern Ireland."

He said accountants wanted to see greater stability in the Stormont administration.

"The flag protest has demonstrated how thin the stability can be and how quickly things can go out of kilter," he added.

"Strong, functioning political stability is what businesses need."

This is the first time lack of political leadership came back as something holding the economy back from recovery. The survey was carried out in February following loyalist flags protests.

According to the accountants' survey, 85% of members believed firms were putting investment or expansion plans on hold because they could not access finance.

Most chartered accountants felt bank loans and overdrafts have become more difficult to obtain in the past year. Trade credit was also viewed as less available.

Finance was a particular issue for small firms, the construction and services sector. It was less of a problem for manufacturers but more so for exporters.

The construction outlook was considered poor over the next year by 84% of members.

91%

Said we are performing worse than the UK

63%

Said they wanted new Department of Economy

85%

Said firms were putting investment on hold