North's economy 'to suffer into 2011'
The North’s economy will suffer into 2011 or beyond, a group of experts claimed today.
There are few signs of optimism in the short term and a prolonged period of poor economic performance is expected, the chartered accountants said.
More than half those surveyed rated the immediate prospects poor or worse and only 7% were optimistic about the year ahead. More than a third were uncertain about the local outlook.
With First Minister Peter Robinson temporarily standing aside to deal with his marriage and personal difficulties and negotiations on devolving policing and justice powers to the Assembly continuing, the survey confirmed political stability was an important issue.
Kevin Kingston, chairman of Chartered Accountants, Ulster Society, said: “This survey doesn’t pull its punches. It calls it as it is and shows how there is an uphill battle ahead over coming years with every sector having to overcome tough economic challenges.”
He added securing long-term sustainable funding was the major challenge for private businesses.
The research included 500 chartered accountants in private practice, industry and the public sector.
It showed availability of finance and a lack of capital was a major current concern, with almost all those who replied stressing the difficulties in accessing finance as a key issue for their own business or for their clients’ businesses.
Mr Kingston added: “In the public sector the greatest task we face is how we reshape and reorganise regional and local government. There is a clear view from our members that things cannot go on as they are, and that the public sector will have to bear their share of the burden as Northern Ireland grapples with the downturn.
“Action cannot be delayed, and ministers in the Executive face the challenge of streamlining what some view as a top-heavy bureaucracy whilst maintaining frontline services.”
Pessimism around economic recovery in the short term was most keenly expressed among exporters, small firms and those in the manufacturing and construction areas.
A review of public sector pay and a general reduction across all departmental budgets was considered essential. However budgets for innovation, export promotion and research and development should be protected.
Around 85% of chartered accountants felt finance to business had become less available, particularly for small businesses.
Maureen O’Reilly, senior economist with the Economic Research Institute of Northern Ireland, analysed the survey.
“Without doubt the banking crisis is continuing to have a major impact on the supply of finance to local business. This is evidenced by widespread agreement among members that finance has become less available, more costly and is impacting on investment plans,” she said.
“Government has a key role to play but intervention needs to be immediate and much more effective in assisting the small firm sector which makes up the vast majority of businesses in the Northern Ireland economy.”
