A recent survey by the NI Chamber of Commerce and Industry has revealed that most businesses in Northern Ireland were trading well, or at least reasonably well. 60% of the businesses that took part in the survey believed that their turnover would grow over the course of 2023, but on the negative side over 80% of the businesses said they were being badly affected by the rise in energy prices and 40% of them had some form of debt to deal with.
Recruitment Still An Issue But Threat Of A Recession Wanes
Recruitment was still a major issue for many firms which in turn has led to rising labour costs. However the threat of a major recession seems to be definitely on the wane as most businesses claimed they were confident about their future prospects.
Speaking about the current business climate, Ann McGregor, chief executive of NI Chamber, is quoted in a recent article in the Belfast Telegraph, saying:
“This means turning targets into action and being confident and ambitious about economic growth now.
“After a notable decline in business confidence in the second half of 2022, results from Q1 of this year show a significant and timely improvement.
“Three years of economic challenges including EU exit, the pandemic, global supply chain crises, inflation and political instability have all taken a significant toll on our members, so it is encouraging to see sentiment improving, albeit from a weak base.”
But she said policymakers now needed an “absolutely razor-like focus” on economic growth.
“We must capitalise on the opportunities offered by the Windsor Framework and ensure that operational challenges are minimised.
“Of course, that is just one part of the jigsaw; for optimal growth businesses need a restored, functioning Executive to support them in attracting and retaining the best people, with the right blend of skills.
“Helping businesses tackle the skills challenge is just one of the many reasons we need to see the devolved institutions restored urgently.”
Positive Sentiment Across All Sectors
In the same article Brian Murphy, managing partner of BDO NI, is quoted as saying:
“Although local companies still have challenges to face, it is hugely encouraging that we are seeing such levels of consistency in positive sentiment across all sectors.
“The survey highlights that four in five businesses are trading either well or reasonably well, this is particularly notable given the testing backdrop of rising costs and barriers to recruitment.
“Within manufacturing, local businesses are outperforming the UK average and in the service sector, we are the top performer in the UK across nine of the 11 indicators.
“The impact of the pandemic is still being felt by many businesses, particularly in how they are managing their debt.
“Whilst there is still a significant number of organisations with at least some concern in how they can maintain debt repayments, it is notable that over 47% are currently debt free, a significant achievement in this climate.
“For Northern Ireland companies to continue to compete there is an urgent need for investment in people and skills, this will facilitate access to a diverse and skilled workforce, which is clearly in demand.
“Such investment would play a key role in boosting productivity across the economy and as a result, unlocking our future growth potential.”
We have mentioned the need for investment and the need for the Executive to take an active role in helping our businesses realise their true potential many times before in our blogs. This is now a matter of urgency so let us hope we see some progress very soon.