Slow growth and political impasse hitting Northern Ireland economy, survey reveals
Slow growth and heightened frustration over the lack of an Executive is holding back businesses in Northern Ireland, according to a major survey.
And the region's economic performance is lagging behind the rest of the UK, the research by the NI Chamber of Commerce and Industry and business advisory firm BDO revealed.
The Quarterly Economic Survey (QES) for quarter one showed the year got off to a poor start, with domestic sales balances at their lowest since 2013.
It also stated that 76% of firms were experiencing pressures to increase wages and that for most key balances, Northern Ireland ranked last out of the 12 UK regions. Manufacturing was the hardest-hit sector with signs of a slowdown and more companies expecting UK sales to fall rather than rise in the next quarter.
Export balances also weakened from a strong regional position in the last quarter of 2017. Meanwhile, the sector's cashflow position was deemed "extremely weak" in quarter one, with the lowest balance on record.
The service sector showed signs of sluggish growth. Domestic sales and orders balances continued an 18-month downward trend while export sales were at -2% compared to a UK average of +20%.
Unsurprisingly, business confidence around turnover and profitability growth over the next year was low. +8% expect turnover growth during 2018 compared to +46% over the same period last year.
Brian Murphy, managing partner at BDO Northern Ireland, said there was "no getting away from the fact that we're the weakest performing region".
However, he said there were still some positives including low unemployment rates, recruitment activity and Brexit-induced investment.
One in four businesses here have made changes due to Brexit, with almost one in 10 establishing a presence outside Northern Ireland. Mr Murphy added: "The absence of the NI Executive and the lack of clarity regarding the arrangements for Brexit is clearly a matter of concern for many.
"However, this report shows there is also an increase in investment intentions by local businesses.
"This is a welcome sign that despite the current uncertainty at a government level, businesses in Northern Ireland will persevere and plan for future success," he added.
Christopher Morrow, head of policy at Northern Ireland Chamber of Commerce and Industry, made a plea to the Executive. "We must see the Executive back up and running in order to safeguard the future of the economy amid a troubling domestic economic backdrop," he said.