Northern Ireland’s business are managing to weather the current inflationary headwinds but most expect the economy to contract this year.
Those are the findings of the latest economic survey from NI Chamber which found one third of businesses are trading well while nearly half are trading ‘reasonably’.
Perhaps surprising given the hike in interest rates and soaring inflation, 55% are confident their business will grow in 2023, that is despite the majority experiencing sharp increases in energy costs.
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Optimism around the wider business world, however, is not as prevalent with 68% of those surveyed expecting the Northern Ireland economy to contract this year. That is despite the fact there is more optimism around a resolution to the Northern Ireland Protocol from NI Chamber’s members.
No such optimism when it comes to inflationary pressures which have impacted nine out of 10 business. They reported significant cost pressures in terms of utilities, labour and fuel costs, with manufacturers particularly hard hit when it comes to rising costs of raw materials.
Ann McGregor, Chief Executive, NI Chamber, said business are proving resilient and should grasp the opportunities presented to them
“Despite the challenges, for a number of reasons 2023 is a year that Northern Ireland must target investment– seizing the opportunities presented in green growth, digitisation and international trade,” she said. “Of course, as we know, the number one ask of any investor is political stability – one of the many reasons why we need to see an Executive restored and an agreed, workable outcome on the Protocol reached without further delay.”
Brian Murphy, Managing Partner, BDO NI said resilience shown by businesses in the current environment is encouraging.
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“We won’t overlook the fact that performance continues to be described as “weak”, but, context is everything and when evaluated against the incredibly challenging environment it should be recognised that maintaining the status quo in terms of performance, staffing levels and recruitment must be seen as a win.”
He was optimistic for the future.
“Although no one can say for certain what 2023 will bring, for businesses to succeed we must be aware of the challenges and be able to deal with areas of risk and concern, we must also use the opportunity a new year brings to plan and adapt for the future to ensure success. Proactive planning by business owners will be key to this success.
“We can make 2023 our year. The opportunities are there to make it happen.”