Foreign investment here shrinks by 50% in 2020 as a result of pandemic
FOREIGN direct investment in Northern Ireland has dropped by 50% this year, the head of a leading authority for FDI has said.
Mark O’connell, chief executive of OCO Global said the drop is a “short term” impact of Covid-19 and is hopeful that 2021 will bring a slow recovery.
Speaking in an Ulster Business podcast he said: “We won’t be back to usual until 18 months.
“But if you look at the success of NI in attracting investment it has shown resilience in Fintech, cyber and activity around the banking and trading platforms.”
Mr O’connell who works alongside Invest NI and other organisations involved in FDI, said the pause button has been hit globalisation everywhere but in the past two weeks some companies have “started to wake up again, especially around the US market with some interest in China, which is in recovery fastest”.
“There is still plenty of capital out there but obviously investors like certainty and we’re in short supply of that. The FDI fortunes in NI are and will remain resilient. We do punch above our weight, per capita, and outside of London we are the best performing in terms of attracting jobs and investment.
“We have, through previous crises, shown bounceback and I would hope this wouldn’t be so different. In the short term there is going to be some pain.”
In a recent interview, Kevin Holland chief executive of Invest NI said NI’S ability, particularly in the digital terrain, to swiftly adapt to a new working world during Covid-19 will appeal to foreign investors and that a pipeline of activity is still looking very healthy.
While Mr O’connell believes globalisation won’t end as a result of Covid-19, he says “selective globalisation” will emerge in industries where policy dictates we need to become more sufficient.
Looking at the impact the pandemic has had on the local economy, Mr O’connell expects the world of travel to change.
“Engineering in aerospace and transportation equipment have taken a massive hit and might never recover.
“What the pandemic has taught is that there is productivity from homeworking, using platforms and virtual conferences and I think people will think twice about jumping onto a plane. Longer term behaviours are going to change. We as a company are saving £60,000 a month on not travelling.
“You can achieve quite a lot remotely. I’m not saying its the end of the end of business deals (in person) but I think it’s tempered how people might do business.”
Among his other predictions in a post Covid landscape, Mr O’connell expects a correction in wages as well as a focus on the environment. “If it hadn’t have been for the crisis, the next focus would have been the environment,” he said.