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Concerns expressed over Brexit impact on Northern Ireland economy

Published 17/10/2016

Angela McGowan was giving evidence on the impact of Brexit on UK-Ireland relations
Angela McGowan was giving evidence on the impact of Brexit on UK-Ireland relations

Household spending in Northern Ireland will be damaged by inflation linked to Brexit, the director of the CBI said.

Levels of foreign direct investment could also suffer due to uncertainty created by the exit, Angela McGowan added.

Manufacturers based in Northern Ireland could shift operations to the Republic to take advantage of freely available migrant labour, another witness told a House of Lords inquiry.

And Northern Ireland will be left more exposed than the rest of the UK to the effects of Brexit because of its small size, the CBI added.

Ms Magowan said: "I think it has the potential to hit all firms and all sectors really because what you are looking at is a blanket implication for access to skills, implications for overall demand within the economy and also as the economy slows the inflationary impact will hit household spending."

The Lords EU Committee was at Stormont taking evidence on the impact of Brexit on UK-Ireland relations.

The CBI chief in Northern Ireland said food manufacturers, the hospitality industry and universities would also be negatively affected.

She added that access to migrant workers and the free flow of talent across borders was vital for manufacturers and pharmaceutical firms.

She said: "Implications of the depreciated currency have a huge impact the manufacturing base."

She said it also affected the logistics of how companies transported their goods or moved their workers.

The hospitality sector, farming and universities relied on migrant workers.

Most of the insurance for the Northern Ireland market was underwritten from Dublin.

Construction was particularly sensitive to business investment.

Ms McGowan said Northern Ireland punched above its weight in attracting Foreign Direct Investment (FDI).

She said: "There has always been a policy aim in Northern Ireland to attract FDI and it is not just about creating jobs for us, this is about creating companies which have high value added, which bring with them good management practice and say for example technology transfer.

"It also helps if we attract foreign direct investors to change the overall structure so we are not so dominant with small firms as well, to bring in those larger firms too.

"Investors seek stability - and obviously with Brexit, the macro-economic stability will not be there and we do think that will affect FDI.

"We do fear for FDI and our ability to attract it."

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