The Top 100 companies, in mid-2008, were reporting an improving economy.
However, the early signs of what 2009 might bring could be detected in some sectors, particularly the banks.
A sign of strength in the Top 100 was the replacement of six businesses by five newcomers to the list.
Five could replace six because one of the six was one of two units under common ownership: Seagate closed at Limavady but remained buoyant in Springtown.
The other five ‘leavers’ are all still in business but four are now (we believe) below the slightly higher threshold for inclusion in the final selection. The fifth, J&J Haslett remains in the list but now as part of its new owners, the Musgrave Group.
One manufacturer has (possibly temporarily) fallen out; a building materials distributor has dropped below the minimum threshold and two service companies are smaller but still trading.
Ironically, four of the new entries qualified for inclusion because they had been playing a part in the expansion of the construction sector. Acheson and Glover make a range of components for building, Macnaughton Blair are distributive building suppliers, McAleer and Rushe are major contractors and Cemex (NI) supplies cement products.
The fifth is the now much expanded crisp maker Tayto Group which has grown through an acquisition in England.
There is a new name at the head of the list of large employers: Resource Services Group. It has displaced Tesco into second place. Without criticising the value of extra employment, a feature of note is that in the largest 10 employers, there are now only two with high value-added per employee: Shorts and Quinn Group.
The recent achievements of the local economy have been employment led. Employment rose faster than in other regions and unemployment fell to new low levels in mid-2008. In the last ten years, there has only been one where total employment fell; 2003. In 2008, these 100 businesses had the biggest employment increase of the decade.
Of the 100 companies, 62 reported an increase in employment and 38 either showed no change or a decrease. That compares with a split of 60 to 40 in 2007. Thirty businesses showed an increase in employment of 10% or more; six reported a decrease of 10% or more.
A useful indication of possible improvements in competitiveness can be seen in the annual changes in overall pre-tax profits. A simple increase in pre-tax profits would not necessarily mean improved competitiveness since, to some extent, inflation and business investment increases would need to be met before the remaining profits reflected competitive gains.
Even against the background of this note of caution, the results, after 2002 and leading up to 2007 were reassuring. The most recent results are less encouraging. Pre-tax profits in 2008 (after excluding the banks, and the huge loss by the Quinn group) only rose by 2.6%. The big gains of the three previous years did not continue.
Profitability effectively fell sharply in 2008 whether measured in absolute terms or as a proportion of turnover.
Even deducting the big exceptional result, a 2.6% increase in profits must have meant much more difficult competitive conditions.
The changing pattern of profitability is illustrated by the analysis of the spread of the changes.
Some 34% of companies either had a bigger loss in 2008 or experienced a fall in total pre-tax profits. Just over 10% of businesses recorded a pre-tax loss. This is almost unchanged on the previous year.
In the list of 100 large companies, 42 are owned by Northern Ireland based principals.