Irish austerity measures ‘will be felt in Northern Ireland’
Austerity measures in the Republic will be felt in Northern Ireland, economic experts have warned.
Businesses here may find themselves suffering as a result of tough conditions for trading partners south of the border, according to Hal Catherwood, divisional director at stockbrokers Brewin Dolphin.
“This combined with our own austerity measures coming out of Stormont and a still stagnant housing market on both sides of the border will inevitably lead to nervousness for both businesses and consumers,” he said.
But Michael Hall, managing partner of accountants Ernst & Young, said it was important to distinguish between Northern Ireland firms dependent on the Republic’s domestic market, and those dependent on its relatively buoyant export market.
“Firms who depended on the domestic market — particularly those which depend on spending on construction and consumer spending — will find things more difficult, particularly in border areas.”
Rising VAT in the Republic could see another exodus of shoppers from the Republic to Northern Ireland — but not in the immediate future, Mr Hall said, as levels in the UK and Republic will be more or less neck and neck until 2013.
But there is one facet of Northern Ireland’s business base which should withstand the Republic’s economic shock. “A huge part of the private sector in Northern Ireland is agriculture and food. People need to eat and drink so things which we sell into the domestic economy will not be hit.”