Growth gap widening with North

By Eamon Quinn

Some evidence of a gap opening in the growth prospects between the economies in the Republic and the North has emerged, according to the body that promotes trade across the island.

InterTradeIreland said its latest survey of 750 business managers showed the vast majority of firms were either growing or were “stable” despite concerns about that Brexit could lead the re-emergence of some sort of hard border.

The body found, however, that, at 45%, many more firms in the Republic were growing, compared with 28% in the North. And in a potential sign of emerging cost and competitive pressures, firms may have slowed their plans to recruit staff.

The findings chime with other surveys that suggest that factories have expanded their output, as domestic demand and from the rest of the world increases.

“Despite the high levels of growth, and the fact that 85% of firms are reporting to be working at or close to full capacity, only a small number of firms reported an increase in employment, a fact that might be explained by the large number which is operating on relatively low margins,” InterTrade said.

“Overall there is a healthy business environment on the island, with an impressive 94% of companies reporting they are in a position of either stability or growth, and 84% indicating they are working close to or at full capacity,” said policy director Aidan Gough.

“While this may be a harbinger of inflationary pressures to come, it could also signal an unwillingness to invest, perhaps, until the uncertainty around the future trading relationship between Britain and the EU becomes clearer.

Mr Gough said 98% of businesses are say they are not formally planning for Brexit. “However, we are encouraged by the fact that an increasing number of firms with cross-border sales are revealed as having started informal preparations.

“Over 40% have discussed Brexit impacts with other businesses and 34% have held internal meetings. With the economy in a healthy space, now is the best time to start looking at how Brexit could impact your business and InterTradeIreland is encouraging SMEs to plan, act and engage in preparation for Brexit,” Mr Gough said.

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