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Fears for Northern Ireland economy as 30,000 on furlough

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Deserted shopping streets around Belfast

Deserted shopping streets around Belfast

Photo by Kelvin Boyes / Press E

Deserted shopping streets around Belfast

Around 30,000 people employed at 500 firms in Northern Ireland have now been furloughed, according to an update from a business boss.

Invest NI chief executive Kevin Holland said the impact of the coronavirus outbreak on businesses had been "dramatic".

He added that the economic development agency had been working to tailor its schemes in support of viable firms who were facing liquidity problems.

So far, he said 500 client firms of Invest NI had furloughed 30,000 staff.

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Kevin Holland of Invest NI

Kevin Holland of Invest NI

Kevin Holland of Invest NI

Mr Holland said the agency was also helping firms who wished to adapt to making scrubs and other goods for NHS workers to help in the fight against Covid-19. "We have been working hard to match NI companies with government calls for support to design and manufacture much needed medical and personal protective equipment for the NHS and front line support agencies.

"To date over 200 NI businesses have expressed interest in supporting the fight against Covid-19." Meanwhile, the head of a body which represents manufacturers said industry in NI has largely closed down, with 81% of firms putting staff on furlough.

Manufacturing NI's Stephen Kelly said the findings showed "we are fighting not only a public health emergency, but an economic emergency too".

With most manufacturers located outside Belfast and Derry, there was a risk that towns and country areas would be worst affected by a downturn in the sector.

We have to be deeply concerned that we will be unable to restart the sector if we leave the lockdown for too long Stephen Kelly

Measures by the Executive and UK Government to protect firms had only delayed a major economic crash, Mr Kelly said.

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Stephen Kelly of Manufacturing NI

Stephen Kelly of Manufacturing NI

Stephen Kelly of Manufacturing NI

More than three-quarters of those surveyed are using cash from the business to sustain employment and other costs, with a small number even using savings and pensions to get by.

But the worst problem for firms was lack of certainty around the jobs retention scheme, a government measure whereby it will refund 80% of wage costs to companies who can no longer operate.

Mr Kelly said the survey found that around 70% of respondents had furloughed more than half their staff, while one in four had completely closed; 60% had furloughed over three-quarters of staff.

He continued: "In whole parts of the sector there is no active production taking place. The manufacturer sector is largely closed down."

There was concern that the job retention scheme was just a short-term fix, he said. "We have to be deeply concerned that we will be unable to restart the sector if we leave the lockdown for too long.

"With most manufacturing taking place outside of the cities (83% of respondents), this must sound alarm bells for the economic health of provincial and rural communities in the months ahead."

He said uncertainty about the furlough scheme would persist until it opens on April 20.

"It is critical that the government stand over their commitment to support all firms who took their advice since March 20 and guarantee the furlough payments. To renege on this jeopardises the short and long-term future of a huge part of the sector."

Belfast Telegraph