CBI survey suggests signs of recovery for NI

The latest survey from the CBI has shown that the manufacturing recession is causing orders to fall thoughout the UK - with the exception of Northern Ireland, where output is expected to increase over the coming months.

The Regional Trends Survey tracked business activity in the manufacturing sector over a four-month period, and found that, on average, the total number of orders is falling at its fastest rate for two and a half years, forcing firms to cut jobs and slash prices.

Firms in most parts of the country expect orders to fall further over the next four months, except in Northern Ireland, the East of England and the South East - and the West Midlands, where the outlook is broadly flat.

In addition, business confidence has deteriorated in most regions compared with four months ago, with the slump in optimism most marked in the West Midlands, which recorded a balance of minus 59 per cent.

However, a report released by CBI Northern Ireland in January suggested that business confidence in the province has started to rise since falling to its lowest-ever levels since CBI records began.

The previous report, released shortly after the events of September 11, documented “widespread pessimism” across both the manufacturing and service sectors, with the current atmosphere of political instability cited as one of the factors interfering with business activity.

That survey pointed towards signs of the start of a revival in attitudes as 2001 ends and the new year begins, with Deirdre Stewart, assistant director of CBI Northern Ireland, stating that "the overall trends – while still negative – are heading the right way back upwards".

However, Northern Ireland did not escape unscathed from the current survey, which indicated that many companies are planning to cut back on training.

Also, domestic and export prices have fallen, and are expected to fall further, in every region.

Ian McCafferty, CBI Chief Economic Adviser, commented: "It is particularly worrying that firms are cutting investment to reduce pressure on profit margins. This could cause real problems in the long term. Lower spending on innovation and training is a major threat to future productivity. The slight recovery in sentiment is encouraging but there is a long way to go before manufacturing is out of the woods." (CL)