Belfast Telegraph

A cloud of pessimism amid the sunshine

From the darkened recesses of the business desk, news has filtered through that spring has been shelved in favour of full-blown summer weather.

While we are as much in need of a healthy dose of Vitamin A as the next bunch of financial hacks, we chose to rush back to our desks to see if this early sun can be taken as a sign of a revival in the local economy. Perish the thought we would actually stay outside long enough to be blinded by natural light. We discovered unpalatable thoughts from the people in the know: accountants.

The Chartered Accountants Ulster Society isn't prone to exaggeration for the sake of it but the results of its recent survey of 500 accountants would make the most bullish commentator a little unsteady.

It found that 80% of accountants surveyed believe Northern Ireland is still firmly (note the word 'firmly') in recession. Just 8% expect there to be a recovery in the next few years.

Suddenly the dark clouds of reality are blocking out the bright light of optimism which we had all been clinging on to with gay abandon.

The reason for this gloomy outlook can probably be traced back to another outcome of the survey which reveals that two in every three accountants believe the availability of finance has continued to deteriorate. That's not good. We thought the last vestiges of the credit crunch had been thrown off but that now doesn't look to be the case.

But they do have an answer: mezzanines.

Derived from the Italian for 'middle' and used repeatedly by estate agents, the term was adopted by the accountants' society to describe a form of finance which could have a much bigger role to play in the future.

They were referring to venture capital and private angel investment, something which most of its members believe would be a huge help to the local economy.

If we can replicate the Mediterranian mezzanine here then there's every reason to believe it, along with a few other measures, will quickly dispel the clinging mists of recession.

That and corporation tax.

The overriding opinion of the financial gurus is that tax varying powers should be devolved, and would stimulate the economy. But they worried the proposed measure would cut the block grant and raise question marks over Stormont's ability to effectively implement change.

Whatever happens it seems it's still a little early to be reaching for the factor 30 just yet. While accountants will always err on the side of caution, the report is a bit of a wake-up call.

In the meantime enjoy the weather, if not the economy. And if you really want to protect yourself from the sun, become a financial journalist.