Cathal Geoghegan, President, Northern Ireland Chamber of Commerce and Industry
On 8 August, Northern Ireland Chamber of Commerce and Industry and BDO publish our latest Quarterly Economic Survey (QES) report for Quarter 2 of 2023.
Now in its 33rd year, the survey is carried out alongside the British Chambers of Commerce, where it is placed as the largest UK private sector survey of business sentiment. The survey is a leading indicator of UK GDP growth and is closely watched by policymakers, including HM Treasury and the Bank of England.
In the past, Northern Ireland has typically ranked among the bottom performing UK regions across most of the key indicators. However, these latest set of findings clearly demonstrate the resilience of business through a protracted period of challenges.
Business confidence appears to be growing again. Investment intentions improved at the start of 2023 and remain positive. Remarkably, Northern Ireland now ranks as the top region for 4 of the 11 key performance indicators, including employment activity, investment intentions and confidence in turnover growth in the next 12 months. The region also now ranks in top 4 UK regions for 9 of the 11 key indicators for manufacturing, and the regional service sector position continues to be relatively strong. A remarkable achievement for businesses established in the only devolved nation in the UK without a Minister for the Economy.
However, whilst trading performance for businesses was largely positive in Q2 of 2023, inflation remains a dominant concern and labour costs persist in putting pressure on prices. Furthermore, almost three quarters of businesses are very concerned about the impact of public sector spending cuts on the Northern Ireland economy, while one in three are particularly concerned about the impact on their own organisation. We’ve a challenging fiscal environment, with inflationary pressures and it’s not an easy time for our members, especially with combined tight labour market and supply chain difficulties.
This is where the continued absence of an Executive simply undermines our potential. Businesses cannot do it alone forever, and put simply, we need political leadership to sustain growth and attract investment. We’re still hopeful in NI Chamber that the parties will come together and we’ll have a functioning Executive without further delay.
It will not be easy. It requires an agreed Programme for Government, something we have not had for over a decade, to ground tough decisions in evidence with a strategic, cross-departmental focus. A Programme for Government needs to be agreed with a sense of urgency and it must be done so with meaningful partnership with stakeholders, not least the private sector.
But there is still time to build on a year of progress and opportunities. We’ve had the presidential visit, the 25th anniversary of the Good Friday Agreement, the appointment of a US Special Envoy, improved EU-UK relations, and the upcoming Investment Conference in September. Ideally, we would be showcasing Northern Ireland to the world with an Executive in place, but we cannot allow political failure to undermine the message that Northern Ireland is open for business.
Our members believe there are significant opportunities to boost economic growth in Northern Ireland with potential opportunities for investment. For example, this was reiterated during the President of the United States, Joe Biden’s visit and through his appointment of Joe Kennedy as Special Envoy for Northern Ireland, demonstrating the US’ commitment to supporting investment and job creation here. With our unique selling points as a gateway to the EU and UK markets, a proven testbed for new technologies and a place apart for green growth, we need to be reminded that we have so much to offer.
As our survey suggests business has got on with playing its part in absence of an Executive. But let’s hope that the current impasse doesn’t drag on much longer, there is much to do.