Belfast Telegraph

Northern Ireland manufacturing bucks UK trend as activity and hopes grow

Clarity call: Stephen Kelly
Clarity call: Stephen Kelly
Margaret Canning

By Margaret Canning

Northern Ireland's manufacturers defied a UK-wide downturn last month with a pick-up in activity and optimism, it's been claimed.

Stephen Kelly, chief executive of Manufacturing NI, said companies had welcomed the certainty provided by the outcome of the general election.

He said that firms who had been putting off capital expenditure programmes had finally "lifted the phone" in December.

"People have spent the last year to 18 months priming contracts and getting things ready."

While buyers had been putting off decisive action, firms were now reporting that their phones were starting to ring.

But Mr Kelly said Northern Ireland manufacturers were not yet out of danger as they needed clarity about a future free trade agreement between the UK and the EU.

Clarity on the protocol governing trade between Northern Ireland and the rest of the UK was also required beyond what it states about providing for "unfettered access" for goods leaving Northern Ireland.

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"The UK needs a free trade agreement with the EU to protect supply chains and routes to market," he said.

"For example, the motor industry and aerospace sector are both particularly keen that there is a free trade agreement.

"From the smaller guys suppling component parts to the primary manufacturers who make maybe 50,000 cars a year, they all need market access."

The chief executive also said Manufacturing NI was "not clear" that agreeing a free trade agreement would be possible within a year, despite the timetable set by the Prime Minister.

But he added: "Regardless of that, all systems, processes and protocols around Northern Ireland and trade with the UK still have to be deisgned and agreed."

He said Manufacturing NI has said it had shared its views with local MPs, with yesterday the deadline for amendments to the Brexit Withdrawal Agreement Bill.

The Bill is to be debated on Tuesday, Wednesday and Thursday of next week.

Mr Kelly said: "We would hope that those who are taking their seats can come together and rally around a set of amendments that defines what unfettered looks like."

Northern Ireland's relative optimism came as the speed of decline in manufacturing UK-wide increased to its fastest pace in almost seven-and-a-half years in December, according to the IHS Markit/CIPS Purchasing Managers' Index (PMI) survey.

The closely-followed IHS Markit/CIPS Purchasing Managers' Index (PMI) recorded a score of 47.5 in December - with anything below 50 seen as a contraction - marking the eighth successive month of missing the neutral mark.

UK-wide, businesses are continuing to wait for greater political certainty before spending heavily in the manufacturing sector.

Rob Dobson, director at survey compliers IHS Markit, said: "New order inflows decreased and Brexit safety stocks were reduced. With demand weak and confidence remaining subdued, input purchasing was pared back sharply and jobs cut for the ninth successive month.

"The downturn is still being hardest felt at companies reliant on investment and business-to-business spending."

He added there was a slight uptick in consumer goods production, but this was not enough to offset the falls elsewhere in the sector.

"On this basis, it looks like UK manufacturing and the broader economy may start the new decade as they began the last, too reliant on consumer spending and still waiting for a sustained improvement in investment levels," he said.

Belfast Telegraph