Blueprint now in place for a bright economic future
As we move from 2014 into a new year it does seem that the grounds for economic optimism have some solid foundations. Towards the end of the year the perceived wisdom was that while the upturn was under way, it was slower than the other regions in the UK and had the age-old Northern Ireland imbalance where the public sector is disproportionately represented in the workforce and in the economy overall.
We have also been held back by a lack of companies involved in exporting and too much variance in the relative strength of specific trading sectors. Certainly our experience in BDO is that some sectors including technology, agri-food, hospitality and leisure continue to move ahead at a faster pace than others and are performing well.
Not all of our economic success is down to factors which we control directly and we are reliant on the strength of the UK and Republic economies, as our nearest trading partners.
Obviously the prevailing global conditions also have an impact on Northern Ireland. The most recent figures from the Office for National Statistics demonstrate that economic recovery throughout the UK has slowed, with only 0.7% growth in the third quarter of this year.
However locally, there remain grounds for longer term optimism. Despite the conditionality of the offer made on corporation tax by the Government, which put the emphasis firmly on our local politicians, it seems that we may be beginning a new era in Northern Ireland where we do have a far bigger say on significant economic policy levers.
Following the Christmas Stormont House Agreement, we now have a timetable for the devolution and ultimate reduction of corporation tax. There is an onus now on our politicians to agree what the new level will be - then we can really begin to shift towards a new economic context, where there is a genuine rebalancing of our economy.
We don't even need to have the new tax in place to use it as a sales tool for our region, we simply need to declare that it is definitely coming.
With that reduction in corporation tax it is reasonable to hope for, and maybe expect, an uplift in the number of companies investing here and in the quality of the associated jobs.
At BDO we have always maintained that one policy measure on its own wouldn't be sufficient and that a comprehensive approach to turning our economy around would be required. That means ensuring a flow of suitably qualified graduates to avail of high-end jobs, the infrastructure to accommodate economic growth and a strategic partnership between the education sector and the requirements of the economy.
The biggest fault in the draft budget was the proposed reduction in the number of undergraduate students our two universities would be admitting from here on. As the budget consultation finishes that is one specific issue which needs to be addressed and corrected before the budget is finally agreed.
Even during the worst years of the downturn there were plenty of examples locally of businesses which continued to seek out new opportunities and which planned for growth in the face of all the gloom, perceived and actual. Those are the businesses which can lead the indigenous effort to build a sustainable economy, alongside the expected uplift in foreign investment projects. Typically they are characterised as having planned for growth, streamlined their structure and managed spending during the downturn, in readiness for the anticipated post-recession period.
We need those companies to be successful and having worked with plenty of them in 2014, we can be confident they will help lift the local economy next year and beyond.
The ingredients are now in place for Northern Ireland to build a bright economic future which is sustainable enough to have an impact right across our society. We have the workforce, we can attract additional workers - and individually and collectively, there is a drive among entrepreneurs and businesses for growth and success.
The coming year is important in many ways for Northern Ireland and it can be a defining 12 months for our economy. Let's hope, and work to ensure, that in years to come, historians will look back on 2015 and say - "that's when they got it right".