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Northern Ireland business growth 'at lowest for five years' as caution takes root: report

Impact: Aidan Gough

Business growth on the island of Ireland is at its lowest for five years, the latest quarterly InterTradeIreland Business Monitor Report has shown.

The report for the first three months of the year indicated that the majority of firms across the island remain "very stable".

However, levels of growth are declining sharply in Ireland for companies large and small, and confidence is a growing issue for businesses across the island.

The cross-border body said: "We are beginning to enter a critical phase of the economic cycle, with businesses across the island taking a collective pause on many key decisions. "It appears that the movement from growth to stability is almost entirely a Republic of Ireland phenomenon with a lot of businesses now adopting a 'wait and see' attitude.

Many companies are working at full capacity (53%), and 55% of businesses are profitable.

The organisation said that while this "at face value is positive, there are underlying indications that a transition is afoot".

It was also stated that in Ireland and Northern Ireland, few firms are hiring extra staff or making investment decisions and business and consumer confidence is increasing as a concern across all industries.

In particular, the body said that construction is "feeling the pinch at the moment", with a significant drop in those in a growth position, falling from 42% last quarter to 16% this quarter. More than one in five in the sector are operating below capacity and only 4% are reporting an increase in sales.

Aidan Gough, InterTradeIreland's designated officer and director of strategy and policy, said: "Overall, there is a sense that business across the island is holding its breath and we are at a crossroads.

"The number of businesses reporting to be in stability mode is at the highest level since we began recording business position in 2011.

"While this is in no way cause for alarm, we also see that companies in growth mode is at the lowest mark since 2009.

"Firms are operating against a backdrop of increasing pressure on the high street, the spectre of inflation, salary increases and uncertainty around Brexit. It is understandable that many businesses at this juncture may be feeling hesitant.

"With hiring flat, staffing is likely to further come into the spotlight with the impending Brexit.

"Thirteen per cent of businesses with cross-border sales have staff in the opposite jurisdiction and 15% of those in the leisure industry in Northern Ireland have staff from the rest of the EU (outside of the UK and Ireland).

"Exporters and those with cross-border sales are indicating they will be most impacted by Brexit, with 21% already seeing a negative impact."

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