Belfast Telegraph

Stormont shambles 'bad for business'

80% of firms think logjam will damage the economy

From left, Brian Murphy (BDO), Ann McGregor (NI Chamber), Maureen O’Reilly (QES economist) and Chris Morrow (NI Chamber)
From left, Brian Murphy (BDO), Ann McGregor (NI Chamber), Maureen O’Reilly (QES economist) and Chris Morrow (NI Chamber)
Ryan McAleer

By Ryan McAleer

Four in five businesses believe the lack of an Executive will damage Northern Ireland's economic prospects in 2019.

The quarterly economic survey from the NI Chamber and business advisory firm BDO revealed that one in four firms believed their business would decline in the coming year.

A total of 259 companies with a combined workforce of 19,000 were surveyed during the final quarter of 2018.

With less than 80 days until Brexit day, the report revealed that businesses here are becoming increasingly negative about the potential impact of leaving the EU.

Around 50% believe Brexit has already led to higher business costs, while one in three (35%) think it has hit turnover.

Just 21% of firms, meanwhile, reported a Brexit-related impact on sales during the same quarter last year.

The new survey also revealed a surge in the number of employers reporting that Brexit had hampered their ability to recruit non-UK nationals.

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Some 32% of businesses reported that leaving the EU had already had a negative impact on the employment of non-nationals. That figure compares with just 5% in the fourth quarter of 2016.

While there were some glimmers of optimism in the new survey, it showed Northern Ireland lying toward the bottom of UK regional tables in many economic measures for the performance of the manufacturing and services sector. It also highlighted cashflow-related issues among businesses here, with a weakening in orders.

Ann McGregor, chief executive of the NI Chamber, said that while the economy was not contracting, it was clearly not growing robustly either.

"This quarter's survey reveals that weak order books along with falling investment intentions made for a muted end to 2018 for businesses," she added.

"With little clarity on the trading conditions they'll face in just two months' time, some companies are understandably holding back on investment plans and making big decisions about their futures.

"The Government's absolute priority now must be to provide clarity on conditions in the near term and avoid a messy and disorderly Brexit - and action must also be taken to get the Executive up and running again."

Meanwhile, Aodhan Connolly, head of the NI Retail Consortium, welcomed a new paper published by the UK Government yesterday, which included a number of Northern Ireland-related commitments, including offering the Assembly a say on whether new single market regulations introduced by the EU would be enacted here.

It also affirmed that there would be no divergence in rules applied in Northern Ireland and the rest of the UK.

Mr Connolly said the paper provided the clarity that the business community needed.

"It restates the commitments that the Government has given to our business community and is a great starting point that will be supported by legislation to facilitate it working," he said.

"We hope that this will go some way to assuage the concerns of the DUP and others so that we can get what we need for Northern Ireland - a Brexit deal.

"We are a mere 79 days until Brexit, and we cannot sleepwalk into a no-deal scenario, which would lead to higher costs that neither business nor the hard-pressed Northern Ireland consumer can  afford.

"In short, we will feel the effects of a no-deal Brexit more than anywhere else in the UK."

Belfast Telegraph

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