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Staff shortages now trump NI Protocol concerns for manufacturers


Stephen Kelly

Stephen Kelly

Stephen Kelly

Fewer than 15% of Northern Ireland manufacturers see the NI Protocol as their biggest business challenge while many are now facing a staffing crisis, a fresh survey has shown.

Almost 60% of manufacturers reported that access to labour is their biggest issue, swamping issues with the Protocol, according to Manufacturing NI, which is headed by Stephen Kelly.

The number of firms being impacted negatively by the NI Protocol has fallen, but remains at around 58%.

Around 17% of firms said they experienced a positive benefit in 2021.

The report points strongly to issues on the GB side impacting Northern Ireland business.

It says “despite a huge effort from NI importers and the Trader Support Service engaging and educating their supply chains through 2021, the awareness, preparedness and willingness of GB suppliers continues to cause strain, as it has done throughout 2021”.

Some 40% of firms say GB suppliers continue to be unprepared.

Meanwhile, two thirds of firms say it largely business as usual with their EU suppliers, which is up from 45% in April and just over half in July.

“However, many firms report that EU origin goods distributed to NI via GB are not freely circulating as promised,” it says. “The EU must find a way for these goods to maintain their economic origin en route to NI.”

Among exporters, around 60% of businesses reported “a settled position”, which is up from less than half in July.

“There is a significant rise from 6.4% to 20.4% of businesses reporting they’ve had an increase in business with GB as a result of the Protocol,” it says.

More than half of firms exporting to the EU said business was “as to be expected”, while the number of companies which reported a significant drop in trade rose from 2.8% to 9.3%.

However, there was a sizeable jump in the number of firms which saw a marginal or sizeable increase in trade, rising to almost 29% – up from 11% when asked in July.

Around two thirds of businesses who accept the NI Protocol “which accept that the Protocol is with us and wish it to work better through mitigation and simplification”, while almost 20% believe it should be replaced.

And on the impact of Covid-19 the report says problems such as delays, stock availability and spiralling costs in their supply chains were “underestimated and ongoing”.

“Undoubtedly 2021 was a very difficult year for manufacturers and indeed all traders in Northern Ireland as the UK’s exit from the EU was confirmed alongside the introduction of new checks between GB and NI,” the report said.

“A lack of time, detail, knowledge and experience exacerbated what was always going to be a hugely difficult task for businesses to adjust.

“This resulted in costs and supply chain disruption being endured by all businesses which harmed their performance throughout 2021.

“However, manufacturers are natural problem solvers and the survey respondents have provided evidence that they are overcoming issues and those who can are increasingly grasping opportunities presented by NI’s unique status by picking up more business in GB and in the EU.

“While they are ‘Protocol Pragmatists’ the results confirm that there are still problems within the new arrangements which need resolved.”