Sat 6th Jul 2013
Jan 2013: Local Firms must focus on exports to drive growth
By Mark Nodder, President, Northern Ireland Chamber of Commerce
A new year is traditionally a time for looking forward in hope. 2013 certainly started with a bit of good news when the US Congress decided to step back from the ‘financial cliff’. Failure to do so would probably have had dire consequences particularly for the UK and the eurozone, the future of which remains uncertain.
Failure to solve the euro area crisis could still lead to a major financial shock and global downturn. It was hardly surprising then that the OECD is continuing to caution that the global economy is still far from being ‘out of the woods’.
In Britain, commentators have been drawing some comfort from a significant rise in employment in extremely difficult economic conditions there. In Northern Ireland, however, we are continuing to see declining employment especially in traditional industries such as engineering and construction. Only food processing is showing resilience and growth in manufacturing.
It’s easy, inevitably, to overdo the gloom about global economic prospects. OECD expects the global economy is expected to make a hesitant and uneven recovery over the coming two years. OECD, in its latest Economic Outlook, urges governments to act decisively, “using all the tools at their disposal to turn confidence around and boost growth and jobs, in the United States, in Europe, and elsewhere”.
GDP growth across the OECD is projected to match this year’s 1.4 per cent in 2013, before gathering momentum to 2.3% for 2014, according to the Outlook. GDP growth in the US is projected at two per cent in 2013 before rising to 2.8 per cent in 2014. In Japan, GDP is expected to expand by 0.7 per cent in 2013 and 0.8 per cent in 2014.
The euro area will remain in recession until early 2013, leading to a mild contraction in GDP of 0.1 per cent this year, before growth picks up to a sluggish 1.3 per cent in 2014.
The OECD suggests a possible positive scenario could arise if decisive policy actions are taken to improve business and consumer confidence, and to boost growth and jobs worldwide.
Interestingly, especially for exporters here, is OECD’s projection that emerging-market economies will continue to grow faster and to offer greater business opportunities. China is expected to grow at 8.5 per cent in 2013 and 8.9 per cent in 2014, while GDP is also expected to gather steam in the coming years in Brazil, India, Indonesia, Russia and South Africa.
I know from personal experience of both China and India in recent months the scale of the opportunities for Northern Ireland prepared to explore these and other developing markets.
There have, in fact, been some excellent recent successes there. In China, for instance, Asphalt Burner Services in Castledawson, an engineering company with highly innovative products for the construction industry that employs just six people, secured business in Shanghai worth more than