Assembly tasked to help manufacturing sector

Chamber CEO Ann McGregor, with BDO partner Brian Murphy and economist Maureen OReilly
Chamber CEO Ann McGregor, with BDO partner Brian Murphy and economist Maureen OReilly

The newly-elected Assembly should prioritise the setting up of a special ‘taskforce’ from the private sector charged with creating a strategic plan for the manufacturing sector to drive competitiveness a leading business body has claimed.

Publishing its latest Quarterly Economic Survey, convering the first quarter (Q1) of the year, the Northern Ireland Chamber of Commerce and Industry said that was the outstanding wish of members .

Produced in association with business advisers BDO the survey reveals that most members believe the manufacturing sector has a future, particularly in higher value manufacturing, but are concerned about the lack of government policy specifically targeted towards the sector.

Many said they are also concerned about the lack of effective energy strategies to support the industry and addressing high energy costs should also be the core plank of any strategy.

“Energy costs consistently dominate member concerns particularly in sectors such as manufacturing,” said NI Chamber chief executive Ann McGregor.

“The Chamber welcomes the recently published recommendations of the Ministerial Energy & Manufacturing Advisory Group but would like to see the NI Executive put in place a plan of action to respond to those recommendations as a matter of urgency.” The survey, which was completed by almost 300 local businesses, was conducted against the background of a number of substantial job loss announcements recently in the sector.

Q1 2016 results show that local manufacturers are continuing to face considerable challenges.

Over the quarter, manufacturing employment balances, reflecting balances of business taking on staff in the last three months and those expecting to in the next three, both fell. Confidence in growth of turnover and profitability has also fallen, investment intentions are lower and fewer manufacturers are operating at full capacity.

However, there were improvements in both manufacturing domestic sales and orders balances this quarter and both are now more positive than UK balances. There were also some small signs of pick up in export orders.

Meanwhile, exchange rates remain a challenge with more than twice as many members (45%) citing them as a key concern compared to this time two years ago.

“There are some signs of growth in the Northern Ireland economy this quarter and it is positive to see an improvement in sales and a slight pickup in export orders in manufacturing,” added Ms McGregor.

“However the sense of uncertainty is palpable. More key balances weakened than strengthened and fewer businesses in both manufacturing and services took on staff.

“Northern Ireland’s manufacturing sector has a future but support from the Executive is crucial to give the sector a level playing field with other regions and countries.”

Brian Murphy, Partner at BDO, said:

“The real take-home message from the first QES of 2016 is that the mood of industry is resolute and that Northern Ireland’s political establishment must meet its concerns with positive action. In particular, we need to see a concerted strategy that focuses on the region’s potential as a centre of high-value manufacturing excellence.”