The 10 biggest stories from the last 10 years
There have been many tales of the unexpected that have shaped our economy in recent years but the Celtic Tiger’s demise stands out
Published 21/12/2010 | 10:10
It's been a topsy-turvy 10 years for the business world of Northern Ireland, and today we have taken a nostalgic backward look at the events which got us talking during that time.
There have been a large number of tales of the unexpected. That the Republic would be mired in financial problems and the reluctant recipient of an IMF/EU bailout would have been unthinkable a few years ago.
Nor could we have foreseen the rise and fall of the Mighty Quinn, as Sean Quinn’s status as a gold-plated folk hero in his native Co Fermanagh and his adopted county of Cavan became dented by difficulties in Quinn Insurance, a sale of which is now being negotiated.
And a trend which made paper millionaires of many of us would prove sadly shortlived as property prices inflated beyond our wildest dreams, only to fall dramatically down again.
While we have resisted the temptation to put our 10 biggest business stories in any particular order —simply because so many of them are of equal magnitude — the prolonged death of the Celtic Tiger is perhaps the most dramatic of them all.
Northern Ireland had looked enviously on at the Republic’s glory days, and we still strongly covet a lower rate of corporation tax, one of the contributory factors which made it the economic powerhouse it used to be. But employment statistics in particular paint a stark picture of how times have changed for our neighbour. It could post an enviable unemployment rate of around 4.4% between 2004 and 2006. Now its unemployment rate is 13.5%. Trade union SIPTU estimates that 301,000 jobs have been lost in the Irish economy between the last quarter of 2007 and the third quarter of 2010. Yet slight increases in GDP and GNP in the third quarter of this year could suggest the Republic is on the up.
We can also look back on the last 10 years and discern that our traditional industries like shipbuilding and shirt making are well and truly finished. But instead of those, we can hopefully count on burgeoning industries like business process outsourcing (BPO) and IT to take up where the old trades have left off.
Whichever industries take up the slack, it’s clear that we need more job creation in the private sector. Finance Minister Sammy Wilson was applauded last week for coming up with a business-friendly Budget. And even though Mr Wilson has warned of the costs of cutting corporation tax, we can be pretty sure that that issue will remain a dominant one for the |next 10 years in business here.
Northern Ireland tourism
Who’d have thought it? Belfast was named a Lonely Planet must-visit destination in 2006. The Merchant Hotel, a converted Ulster Bank in the Cathedral Quarter, was the most luxurious hotel the city had ever seen.
The Big Wheel was a popular addition and one enterprising ex-bus driver came up with bus tours of Belfast. Retail was transformed by the glittering domed palace of Victoria Square.
Overseas visitor numbers shot up, but the global economic downturn of the late noughties put paid to that. Now, as the compound nouns dreamed up during the recession become common parlance, we’re focusing on ‘staycationers’.
End of ships and shirts
The noughties saw the end of two of Northern Ireland’s traditional industries — shipbuilding and shirt manufacturing.
Harland & Wolff in Belfast built its last ship, RoRo ferry Anvil Point, in 2003.
In the north west shirt factories closed down after employing around 10,000 people at their peak. Glenaden Shirts, which shut in 2008, was one of the last to go.
But Harland & Wolff has enjoyed a renaissance and is now a manufacturer in renewable energy.
The north west also had something to celebrate as Rigney Dolphin said it would create 300 jobs in Londonderry over three years, while the city will also be the UK’s first City of Culture in 2013.
Transport: Roads to success
The last few years has been a period of change, most of it for the better. Belfast’s Westlink, M1 and M2 motorways were updated while new roads in the Republic cut journey times to Dublin.
We had a ‘save our trains’ campaign but now Translink is awaiting a new batch of trains. In Belfast, Metro’s pink buses replaced the red Citybus. The arrival of airlines like Ryanair and Aer Lingus broadened choice, but also created controversy.
Aer Lingus’ cancellation of its Shannon-Heathrow service in favour of a Belfast-Heathrow route caused such outrage in the Republic it was reversed.
Ryanair’s Belfast visit turned out to be just three years due to a bitter row over a runway extension.
Sean Quinn: Rise and fall
If ever a man bore the hefty weight of embodying one small island’s period of boom and bust, it would be Sean Quinn.
The Fermanagh man started with some gravel on a farm in Derrylin to becoming Ireland’s richest man, with interests in cement, hotels, glass and insurance.
It was the last of those which hogged the headlines in 2010 when Quinn Insurance was put into administration after the Financial Regulator deemed that it did not have the cash reserves to meet its liabilities.
Mr Quinn and his family were also embroiled in the scandal which hit the Anglo Irish Bank and he no longer reigns supreme on the rich list like he once did.
Property boom and bust
House prices in Northern Ireland accelerated at the fastest rate in the UK with the average house price going up to £240,400.
With mortgage credit flowing at its most ready rate ever, many people bought second homes as buy-to-let landlords.
But the US sub-prime crisis of 2008 triggered the global economic downturn, and our property bubble burst. Now transactions are down, mortgages are hard to obtain and for sale signs are gathering dust.
The average price of a house is now below £150,000 for the first time in five years.
It’s fair to say that if our homes were once the carriages of our fortune, they’ve now turned back into pumpkins.
The Canadian owner of Shorts was behind a £520m investment in Northern Ireland — the biggest ever in the province — when it announced the advanced composite wing development programme of its new C-Series aircraft would be carried out in Bombardier’s Belfast factory. Bombardier has built premises next to its Queen’s Island site for the work on the C-Series and the investment guaranteed the jobs of hundreds of workers.
The aircraft will enter service in 2013, so while the last 10 years have been turbulent ones for aviation as much as any sector, Bombardier sees out this year with plenty to look forward to.
Fall of the Celtic Tiger
Ever the bridesmaid, Northern Ireland looked on for much of the noughties as the Republic became the envy of the world on the back of the Celtic Tiger.
International firms set up in the south and at one stage employment grew to 96%.
Now, however, it has changed completely with recession, emigration, a property crash and the collapse of its banks — most notoriously, the so-called ‘builders’ bank’ Anglo Irish.
The Republic’s unloved coalition government recently accepted an IMF/EU bailout — but a slight growth in GDP and GNP for the end of this year is a chink of light at the end of a very dark tunnel.
The energy sector
The last 10 years have seen major change in this pivotal sector. The spread of natural gas in Belfast continued through Phoenix Natural Gas. Firmus Energy came on board in towns in the north, west and south of the province and now in Belfast.
Plans were unveiled for a north-south electricity interconnector and a single electricity market for north and south came to pass in 2006. But it was this year’s announcement of the £1bn sale of Northern Ireland Electricity to the Republic’s state-owned ESB that caused the biggest waves.
Unionist politicians were enraged that a prime cut of Northern Ireland’s infrastructure was to be sold but Enterprise Minister Arlene Foster insisted it made sense.
Bubbles burst in recession
Businesses benefited from a stable environment after devolution was restored in 2007. We also enjoyed a property boom and growing employment.
But in 2008 America sneezed as a result of ‘sub-prime’ mortgage lending and the rest is history. Recession continues to grip Northern Ireland and much of the rest of the world and the province’s unemployment rate now stands at 7.6% compared to 4% three years ago.
Business groups have plenty of ideas on how to put matters right.
Cutting corporation tax is a favoured option here and it is drawing tantalisingly closer as the Executive peruses an economic paper from the Coalition Government on the subject.
‘Euro tourists’ at our tills
We saw the rise and fall of cross-border shopping between 2008 and 2010.
With the euro strong against the pound, hordes of Irish shoppers were a common sight in Northern Ireland’s malls.
Trolleys piled high made their way towards tills in Londonderry and Newry. Sainsbury’s in Newry could claim the chain’s busiest off-licence while Asda in Strabane was one of parent company Walmart’s busiest stores worldwide.
But the ‘euro tourists’ were branded “unpatriotic” by Finance Minister Brian Lenihan.
The cross-border shopping boom is tailing off, but some believe Ireland’s recently announced ‘austerity’ budget may prompt its shoppers to head north once more.