Political uncertainty hitting growth, business survey says
STORMONT must form a working Executive and stop “point-scoring” to ensure Northern Ireland’s economy does not falter, businesses have said.
According to the Northern Ireland Chamber of Commerce and Industry and BDO, a working Assembly, no hard border with the Republic and lower corporation tax are the three key areas affecting business decisions on expansion.
But the latest survey for the first quarter of the year says that “investment intentions remain weak in the wake of Brexit”.
It says almost a third of companies quizzed said they were putting growth plans on hold amid the current uncertainty.
The survey says while manufacturing is seeing its sales balance rise, exports have not picked up in line with the UK as a whole.
It also says more manufacturers have taken on new staff in the last three months.
However, more than twothirds of companies are currently experiencing recruitment difficulties.
The services sector saw steady performance. Overall, around 70% of all companies said they would be increasing staff wages in the next 12 months.
But one economist has argued that may be due to companies having to raise pay because of increases in the National Living Wage.
Most firms are continuing to feel the pressure of higher input costs, with manufacturers reporting that rising raw materi- al costs are putting pressure on prices.
This is impacting on around 60% of businesses.
Despite uncertainty over Brexit, 12% of firms are planning to grow as a result of the EU exit vote and 15% are planning to expand outside Northern Ireland.
Speaking about the current crisis at Stormont, one business told the Chamber: “We simply want an appropriate focus on the economy to allow business to drive wider economic prosperity. Please get on with it, Stormont.”
Another said Stormont should “grow up and get together to work for the country”.
“There is still too much point-scoring and not enough effort going in,” it said.
“Overall, the survey demonstrates the fact that there are longstanding structural issues here at home that we need to tackle to sustain success in the future,” NI Chamber head of policy Christopher Morrow said.
“In the here and now, many businesses are resilient and experiencing solid growth. However, we do not know how long this will continue, especially in light of the current political situation in Northern Ireland. Businesses do not like the current uncertainty caused by the lack of an Executive.”
Brian Murphy, partner at BDO, said: “The latest results show that companies are maintaining their positive momentum from last year and there is a healthy confidence, particularly when it comes to recruitment and remuneration.”
Meanwhile, the former boss of global toy brand Lego has said the company had to “think outside of the box... and get out of the box” in order to maintain growth and to avoid being labelled old-fashioned.
That was the key message from Christian Majgaard.
He was the guest speaker at NI Chamber’s Growing Something Brilliant Leadership event in Belfast.