A new report has claimed that business confidence has taken a hit in Northern Ireland due to the impact of the conflict in Ukraine. The military aggression that Russia are dishing out to their neighbours, leading to a raft of sanctions being doled out to them in a bid to curb their actions, has brought more fears that the price of oil and gas will increase even further than it already has.
Huge Spike In Costs In March
There has been a huge spike in costs to business in March, since the conflict began, which in turn has led to ever more higher rates of inflation, which is making the business sector very jittery indeed, according to the latest purchasing managers index (PMI).
Ulster Bank’s chief economist Richard Ramsey is quoted on this subject in the Irish News today, saying:
“There is no disguising the impact that the Ukraine/Russian conflict has had on business conditions,
“This has manifested itself in three key areas – escalating inflation, a slowdown in incoming business, and a significant dent to business confidence.
“All sectors saw the pace of new orders growth slow or fall in the case of construction, this was the ninth successive month of order book contraction.
A Cost Of Doing Business Crisis Is Affecting Local Firms
“We have heard so much about the cost of living crisis, but the cost of doing business crisis is also affecting local firms in spades,
“With these inflationary pressures, combined with supply chain disruption and ongoing skills shortages, private sector firms reported a big fall in confidence regarding the year ahead,
“Manufacturing is still the most optimistic sector, followed by services. But construction firms expect no growth over the next year and retailers anticipate a fall in output.
“With consumers’ finances now under so much pressure from, for instance, the doubling in the price of home heating oil in the space of two weeks, retailer sentiment has in effect done a 180 degree turn in the space of a month. It has gone from expecting strong growth to now expecting a marked decline.
“The key drivers of the falling confidence – inflationary pressures and supply chain disruption – are not going away,
“Indeed with tax rises coming into effect in April, pressures on businesses and their customers will intensify.”
We all pray that Russia will come to its senses and order can be restored in Ukraine so that they can live in peace once more, but the situation is looking increasingly bleak as each day goes by.