Northern Ireland firms warned to prepare for another difficult 12 months
Turbulence at major manufacturing firms in Northern Ireland this year should serve as a warning to other businesses, an expert has claimed.
Bus manufacturer Wrights Group was among the big names who faced trading difficulties during the past 12 months, partly due to a downturn in its core market in the UK.
Nigel Birney, head of trade credit at credit insurance broker Willis Towers Watson, warned that more problems for other manufacturers and smaller firms in their supply chain could follow this year.
He said there were indications Northern Ireland could already be in recession and that firms should review contingency plans.
He added that firms with complex supply chains were at particular risk from bad debt.
Mr Birney said: "We saw earlier this year that trade credit insurance policy payouts have hit a 10-year high in Northern Ireland.
"Coupled with Brexit uncertainty and the contracting of the wider economy, this strongly suggests that a major economic downturn is right around the corner.
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"Key industries such as construction, retail and manufacturing, which are absolutely crucial to Northern Ireland's economy, are showing worrying signs of contraction and decline."
Mr Birney said the troubles faced by Wrights Group and Harland and Wolff should serve as a warning to others.
The difficulties at both firms ended with their sales to Bamford Bus Company and Infrastrata plc respectively. But Mr Birney warned: "As we move into the new year, firms must take heed of these warnings.
"No company is too big to fail or too small to not be able to afford not to take the necessary measures to protect against economic volatility and uncertainty.
"I particularly urge those businesses which fall into the SME bracket here to insulate themselves against economic upheaval and decline.
"Small businesses make up the backbone of our local economy - over 80% of businesses are SMEs - but they are more vulnerable and exposed to the potentially catastrophic impact of insolvencies and bad debt.
"I would urge all businesses, big and small, to either implement contingency plans or review their existing credit control procedures and consider incorporating credit insurance immediately."
The latest monthly PMI (Purchase Managers' Index) figures released by Ulster Bank showed that business activity in Northern Ireland was at its lowest in seven years.