Belfast Telegraph

Accountants gloomy on Ulster economic outlook

By Margaret Canning

Northern Ireland's chartered accountants say the province is still in recession and are gloomy about the future, a survey by a professional body found.

Two thirds of the 500 members surveyed told their industry body that prospects were poor or worse, and just 4% were optimistic about the future.

More than 90% told Chartered Accountants Ulster Society (CAUS) that they were not expecting recovery to get under way until this time next year.

And almost as many thought the province was performing worse than the UK, lagging behind because of its exposure to the Republic, the extent of its property collapse and its reliance on the public sector.

The research also said businesses were fretting about rising operating costs and were worried about obtaining finance from banks - albeit less than they were a year ago.

But there was some positivity among accountants for manufacturers and exporters, for whom they felt prospects were "good or better" than this time last year.

CAUS chairman Michael Black said: "Members' views remain that availability of bank finance is a serious matter.

"It would be widely recognised that there are much tighter criteria about what makes a bankable proposition."

Vice-chair Fergal McCann added: "Banks are moving towards terms that perhaps 10 years ago would have been recognised as more common.

"The terms of engagement have changed."

Mr Black said businesses should be able to call more readily on alternative sources of finance, such as venture capital.

But there was no active 'mezzanine' fund for firms who were past the start-up stage in Northern Ireland.

Most members supported a cut in corporation tax, with almost half saying a reduction should be introduced immediately.

And while there was still some time to go before the Treasury may give a green light to cutting the rate, Mr Black said: "Two years ago many people would never have believed it would have gotten to a consultation paper, which is a sign it is being seriously considered."

The survey was formulated by Maureen O'Reilly, chief economist at the Economic Research Institute of Northern Ireland.

She said there were signs that the low-cost and low-wage model of Northern Ireland was attracting attention.

"One investor recently told me: 'We came for cost and we stayed for people'."