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EU Referendum: Northern Ireland firms braced for change amid recession warning

By John Mulgrew

Published 25/06/2016

Ulster Bank chief economist Richard Ramsey
Ulster Bank chief economist Richard Ramsey

Northern Ireland businesses are planning to move work elsewhere as fears over a return to recession gather pace following the vote for a Brexit.

It is understood some companies have already pulled recruitment plans for Northern Ireland because of the decision.

The Department for Infrastructure warned there would be "severe implications" for large budget road projects, possibly including the York Street Interchange in Belfast.

Ulster Bank's chief economist, Richard Ramsey, said the vote to leave would lead to "slower economic growth", and that a potential return to recession would be accompanied by job losses and rising unemployment.

"Investment plans by companies will likely be postponed or cancelled, which would hamper job creation and potentially mean that some staff would be surplus to requirements," Mr Ramsey explained.

It is understood two manufacturing firms here have serious concerns about their long-term sustainability.

Another unnamed home-grown business is also looking into moving its operations to the Republic of Ireland.

While Bombardier previously said it was committed to its operations here, an aviation expert warned that leaving the European Union would lead to "great uncertainty for Belfast workers and their actual and potential customers in Europe".

CBI director Nigel Smyth also said "many businesses will be concerned and need time to assess the implications" and that the "choices we make over the coming months will affect generations to come".

There are additionally concerns over what will happen to EU nationals working in the UK.

Louise McAloon, partner at Worthington Solicitors, said their future depended on whether the Government decided "to negotiate for free movement or if they will impose a visa system".

Economist John Simpson also warned that while the "scare predictions of economic gloom and loss of jobs have been overdone", Northern Ireland must now "adjust to the changed business environment" created by the "unwelcome change" of a Brexit.

"Avoiding job losses and revitalising the local economy have become more challenging tasks," Mr Simpson explained.

One of Northern Ireland's largest employers, Moy Park - a firm supporter of EU membership - said that although there would be "changes to the environment in which we operate, we are confident that we have a robust business that can continue to thrive and grow".

But Peter Fitzgerald of pharma giant Randox, said: "There will be potential benefits for our UK operations if there is a reduction in the administrative burden imposed by Brussels."

And Alastair Hamilton, Invest NI's chief executive, insisted: "We are confident that Northern Ireland will continue to succeed as an attractive location for inward investment".

He also claimed that the planned reduction in corporation tax would "play an invaluable role in creating a business-friendly environment to support job creation".

As for the border, Seamus Leheny of the Freight Transport Association said "coming out of the European Union risks new costs, restrictions and bureaucratic requirements being imposed on moving goods in and out of Europe".

The Bank of England will move to slash interest rates to zero within months as the UK grapples with the economic impact of Brexit, City experts said, while governor Mark Carney predicted volatility "can be expected" in the wake of the vote.

Belfast Telegraph

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