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Nearly half of Northern Ireland manufacturers in growth mode, survey finds

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From left, Stephen Kelly, Maureen Treacy and James Donnelly

From left, Stephen Kelly, Maureen Treacy and James Donnelly

Philip Magowan

From left, Stephen Kelly, Maureen Treacy and James Donnelly

More than half of Northern Ireland’s manufacturing businesses are experiencing growth so far this year, according to the latest survey of firms.

The number reporting growth increased by 4% to 52% compared to April 2021, according to the regular survey for Manufacturing NI and Tughans, the commercial law firm.

Only 11% described their business as reducing or contracting, compared to 17% at the same time last year.

But manufacturers said that among suppliers in Great Britain, “unpreparedness and unwillingness to adopt the new Brexit regulations remain a significant barrier to trading”.

Other concerns included rising energy costs, cost of doing business, availability of raw materials and the recruitment of skilled workers.

Nearly all (98%) manufacturing firms have experienced an increase in energy costs in the last 12 months while 2% say theirs have remained the same. Close to half are planning investment in green technology and energy efficiency measures.

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The region’s top manufacturing sectors include machinery and equipment; rubber, plastic and other non-metallic mineral products; and wood, paper and printing.

Resilience and optimism of Northern Ireland firms have continued to help build confidence in the sector, Manufacturing NI chief Stephen Kelly said.

“The survey demonstrates that despite very difficult headwinds from rapidly rising input costs and the complications of Covid and Brexit, our manufacturers again demonstrate they are positive problem solvers and increasingly picking up new business in markets at home, in the UK, EU and across the globe.

“It is a clear illustration of the determination of the sector to get through the turbulence despite current minimum public assistance. Manufacturers are again leading the economic fight back and with the right environment are poised to ensure we recover our status as an industrial powerhouse”.

Firms are successfully navigating troubled waters and continue to achieve success, said James Donnelly, head of corporate at Tughans.

“Despite worsening trading conditions, many of our clients in the manufacturing sector are reporting strong growth in the last year,” said Mr Donnelly. “The changing conditions are seeing a greater appetite to adapt through investment in plant and automation, new energy systems and sourcing raw materials.”

The cost of doing business and particularly expenditure on transportation has affected more than 80% of businesses. A quarter said the increased cost of doing business was the main obstacle to recovery of their firm.

At 98%, nearly all manufacturers have faced growing costs of raw materials and 36% of them believe their GB suppliers remain unprepared for the new requirements.

Disrupted supply chains are the biggest obstacle to the recovery of 14% of the firms surveyed and 66% say they require supply-chain support to mitigate the impacts of Brexit and Covid-19 as the economy reopens.

As a result of the recruitment crisis 58% of firms are exploring automation and investment in technology to mitigate the effects of labour shortages.

The survey was conducted by Perceptive Insight from April 1 to 22, and a total of 130 companies across Northern Ireland participated.


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