Belfast Telegraph

Wednesday 16 April 2014

Call for action to boost economic strength

Real action is required on the economy, businesses have said as a survey shows Northern Ireland's economic performance is lagging behind the rest of the UK.

The Northern Ireland Chamber of Commerce's quarterly economy survey, produced in association with business advisers BDO, found business confidence among its members was low compared to other parts of the UK.

It was the only one of eight UK regions where exports fell in 2012 – at £5.6bn the volume of goods exported from the province was down 3% over the year.

But there had been a small improvement in export performance in the last quarter, as export sales had gone up for 34% of businesses this quarter compared to 29% of businesses during the final quarter of last year.

Out of over 400 businesses surveyed, just under half believed turnover would increase over the next 12 months, while 23% thought it would fall. Around 37% predicted profitability would go up and 27% expected a decrease.

Despite the pockets of optimism, confidence about profitability in the services sector was second lowest in the UK, and third from bottom for manufacturing.

Chamber chief executive Ann McGregor said: "This quarter's survey shows some signs of improvement – albeit modest, however many balances are still below pre-recession levels. The business community must continue to press for pro-growth polices to start rebalancing the Northern Ireland economy.

"Increasing exports is one of the main ways Northern Ireland can start to reduce its over dependence on the public sector and address its low level of productivity vis-a-vis the UK regions.

Peter Burnside, head of tax at BDO, said: "It is a real worry that Northern Ireland is lagging behind the rest of the UK in terms of recovery. Our clients tell us that real action is required."

The survey also probed members on the subject of membership of the EU, the first survey to do so after Prime Minister David Cameron made a speech signalling that he would hold a referendum on EU membership.

Only 7% of respondents said they thought the UK's withdrawal from the EU would be good for the province.

One in five non-exporters indicated that they felt their product or service had export potential, but said the fear they did not have enough staff prevented them from acting on export.

Those who were already exporting said that currency fluctuations posed the biggest challenge.