Economic recovery welcome but fragile
BUSINESS organisations in the Province reacted cautiously yesterday to the news that the UK was officially out of recession.
As the first GDP figures for the year revealed growth in the last quarter of just 0.1 per cent, the small business sector in particular warned against any complacency.
Independent retail group NIIRTA said the economy remained extremely fragile.
“While it has to be welcomed that we are ‘technically’ out of recession, these growth figures are very weak and we have a long way to go before the UK economy’s recovery is sustainable,” said Chief Executive Glyn Roberts.
“There is no doubt we have seen increased consumer confidence in recent months with more people spending more in retailers, keeping low interest rates is essential.”
Wilfred Mitchell, Policy Chairman of the Federation of Small Businesses (FSB), said the figures were encouraging and a tentative step in the right direction.
“However, feedback and evidence from members over the last 12 months clearly indicates that small business owners in Northern Ireland have felt the impact of the economic recession more than their counterparts in the rest of the UK.
“A 0.1 per cent recovery is a frail one and it will take a considerable amount of time to bounce back from such a prolonged and deep period of downturn that has seen thousands of jobs lost, homes repossessed and businesses closed.”
It was vital now, he said, that small business was given the tools needed to speed up the recovery and that consumer confidence was bolstered by steady interest rates.
“For small businesses, having access to affordable finance and credit is important, as firms will look to grow and create jobs,” he added.
“The FSB is urging the Government to re-think its plans to increase employer National Insurance contributions as this tax on jobs will discourage small businesses from taking on additional staff, which will prevent them from growing and put a further block on economic recovery.”
Northern Bank Chief Economist Angela McGowan said the growth had been below the anticipated figure of 0.4 per cent underlining the fragility of a “technical” recovery.
“The UK data is consistent with Northern Bank forecasts which also showed that the Northern Ireland economy pulled out of recession at the end of 2009. However, like the UK, local economic growth remains weak.
“In the first instance, debt levels will force the government to withdraw the fiscal stimulus before other countries withdraw their measures. High levels of personal debt means that domestic demand will be relatively weak.
“In addition, the financial sector, which plays a significant role in the UK economy, still remains fragile. Overall, UK economic output is expected to grow by one per cent over the whole of 2010, which by historical standards is well below par.”
While the figures might help boost consumer confidence, she said the low growth expected this year would probably translate into a jobless recovery.
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Weather for Belfast
Wednesday 15 February 2012
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