The Northern Ireland Executive needs to be restored to help stem waning confidence in the economy and tackle rising costs, the Chamber of Commerce and Industry has said.
It said politicians have a full in-tray of “overdue reforms” and, while their return to government won’t temper the myriad of headwinds currently facing businesses, it would ease the pressure on companies at a crucial time.
NI Chamber’s pleas come as it released its latest economic survey, in partnership with BDO, which showed that the percentage of businesses posting a positive performance eased in the third quarter of the year while confidence in future performance has also been eroded. More manufacturing and service sector companies said they believe turnover will grow than contract while but that confidence has been falling since the start of the year.
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Meanwhile, firms also expressed concern around their profitability over the next year with more expecting a fall in profits than a rise.
Manufacturing firms have been hit hardest, according to the survey, with order books weakening and firms facing a “perfect storm of cost challenges”. The services sector remained positive in the third quarter “but order books are weaker and profitability is a serious concern”.
Ann McGregor, Chief Executive of NI Chamber, said the escalating costs and signs of a slowdown in demand are dominating.
“In this challenging context the need for the restoration of an Executive is clear,” she said. “While a functioning Executive will not solve the cost of doing business crisis, the in-tray of overdue reforms and resultant crises continues to grow.
“It is our firm belief that with political will, a range of devolved policy levers could be used to help ease pressures on our businesses; from unlocking green growth through planning reform, to investing in people through health transformation, up-skilling the workforce and tackling the cost of childcare.
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“Today’s survey findings are proof that the business case is now too compelling to tolerate further delay.”
In light of the recent surge in energy prices, Ms McGregor also called for the formation of an energy taskforce.
“For as long as we remain without an Executive, an Energy Taskforce should be established immediately between policymakers and relevant stakeholders, to address Northern Ireland’s unique circumstances and secure the best outcomes in tackling the energy crisis, protecting security of supply and driving the low carbon transition.”
Brian Murphy, Managing Partner at BDO NI, said local businesses have performed well despite the challenges.
“However, the results we announce today also show an economy and a market that are in flux," he said. "But despite this flux, we have not yet been plunged into a potential recession and with careful intervention, there may still be time to avert this from happening.
“There is no doubt that some of the results are concerning, with; inflationary pressures, weakening of order books, a worsening cashflow position and labour availability all contributing to the challenges that businesses will face in the weeks and months ahead.
“The economy is persevering and has continued to avoid a free-fall. Going forward, we all need time to assess the full impact of the Government’s support measures and the practical help this will bring, that will hopefully be evident in the next quarter. Above all, it is critical that inflationary pressures are addressed and we avoid a protracted and potentially harmful period of rising costs”.