Mixed messages 'diminish business confidence' warns PwC

Business advisors PricewaterhouseCoopers (PwC) have warned that pressures on manufacturing and concerns about political stability may impact on investment and business confidence.

PwC said that more than 12,000 redundancies since 2000 have hit Northern Ireland’s manufacturing sector hard. When compared with the preceding four years, over the last three years average annual manufacturing redundancies have jumped 33%, to take manufacturing employment below 100,000 - its lowest level since records began.

Launching their latest ‘UK Economic Outlook’ PwC described that average growth rates in the UK's traditional industries - agribusiness, manufacturing, mining and construction - as "worryingly low". Between 1984-1991, these sectors grew less than the economy in general, where business services, transport and communications, and retail/distribution made the greatest contribution to overall UK economic growth.

PwC warned that Northern Ireland does not enjoy a private business services sector, proportionate to the rest of the UK and is vulnerable to further manufacturing redundancies. This, combined with continued low levels of foreign direct investment and fears about political stability, could have a direct impact on Northern Ireland’s short-term business confidence and investment.

Commenting on the recent redundancy situation, Philip McDonagh, PwC’s chief economist said: “Manufacturing redundancies have averaged over 300 a month since 2000 and recent redundancies in technology companies are over six times the pre-2000 level, eroding many of the recent gains in this sector.

"After suffering 8,000 redundancies in the past seven years, redundancies in textiles and clothing have fallen dramatically from their peak in 2000. Unfortunately, electronics is now the worst performing sector in terms of job losses and the official figures may understate the extent of the problem, as they do not reflect the impact on sub-contractors and self-employed workers.

“The growing business services sector does not have enough critical mass to offset these losses and the global downturn in foreign direct investment, coupled with concerns about political stability, present Northern Ireland with serious short-term problems.”

PricewaterhouseCoopers, the world’s largest professional services organisation. draws on the knowledge and skills of more than 125,000 people in 142 countries.

(SP)