A business leader and an economist have called for the Executive to deliver a “decisive” budget after an exclusive survey revealed the negative impact of uncertainty about public spending on Northern Ireland business confidence.
Almost three-quarters of businesses questioned by Goldblatt McGuigan for Business Telegraph said they feared public sector cuts were damaging their prospects.
And half of the 280 firms said they feared Northern Ireland’s economy was heading for a deeper recession from which it would not emerge until 2012.
Joanne Stuart, chairman of the Institute of Directors (IoD) Northern Ireland, said: “These are undoubtedly challenging times for Northern Ireland businesses, especially with the impact of any budget decisions by the Executive still unknown.
“It is imperative that the Executive deliver a decisive four-year budget with the priority to grow the economy.” She called on firms to look to export markets for growth. “For businesses the challenge is to look beyond the local market. We have many companies in the service and manufacturing sectors growing through exporting and this has to be the way forward if our economy is to emerge from this downturn in good heart.”
Economist John Simpson said the survey was evidence of “pessimism” among businesses. “Partly this pessimism is enhanced by the uncertainty about the setting of the Budget for the Northern Ireland Executive.
“That uncertainty needs to be removed and it will then become clearer that the immediate impact of a reduced budget on the wider economy is being overstated. The reduced government spending will impact much more slowly than seems to be feared.
“There are, however, some parts of the local economy that may have bottomed out. Some sectors of manufacturing are reporting a small recovery in output. However, the local economy is likely to lag behind any recovery in Great Britain.”