Business First September 2017 Business First September 2017 - Page 59

Chartered Accountants survey shows economic growth in the slow lane A survey of Chartered Accountants across all sectors of the Northern Ireland economy suggests slow growth for the local economy in the year ahead. The survey by Chartered Accountants Ulster Society found that its members regarded political uncertainty and Brexit instability as key issues likely to affect the economy over the next 12 months. Cuts in government spending, concerns around the increasing cost of doing business and rising inflation also featured as negative factors affecting the local economy. The Economy In general terms, while 72 per cent said that they believed the economy was growing slowly or moderately, only 13 per cent viewed prospects for the year ahead as ‘good’ or ‘very good’, significantly down from 32 per cent of members in the previous year. 29 per cent saw prospects for the coming year as ‘poor’ or ‘very poor’, a rise of 11 per cent points since last year. The issues felt to have the most potential to negatively affect the economy in the year ahead were political instability (95 per cent of respondents) and Brexit uncertainty (80 per cent of respondents). On a more encouraging note, 37 per cent of those surveyed identified an improving global outlook as a potential upside. Brexit 59 per cent of respondents said it was ‘critical’ to protect the Common Travel Area with the Republic of Ireland, while 95 per cent were opposed to a hard border. 96 per cent said they wanted free trade in goods, services and capital to be an important aspect of any deal negotiated with the EU. Four out of five Chartered Accountants believed that Northern Ireland will be more negatively affected by Brexit compared to the rest of the UK. Corporation Tax A reduced rate of Corporation Tax in Northern Ireland was identified as potentially a major benefit for the local economy, with 63 per cent saying a lower rate would have a positive effect on Northern Ireland’s economic performance. Jobs, Skills & Wages On the issue of jobs and skills, the survey showed that over half of respondents did not expect head count in their own organisations to change, with 27 per cent expecting an increase in employment levels and 16 per cent expecting a reduction. Two in every five of those surveyed said that their organisation was currently experiencing skills shortages. The survey did predict a squeeze on wages, with more than seven in 10 expecting wage increases for the coming year to be below the current rate of inflation (2.9 per cent, Office for National Statistics, June 2017). Pamela McCreedy, Chair of Chartered Accountants Ulster Society which represents over 4,000 Chartered Accountants in Northern Ireland, said: “Despite an improving global economy our members are predicting more modest prospects locally, with economic prospects slipping back from 2016 and 2015 levels. “The uncertainty created by Brexit stands out. Our members clearly feel that Northern Ireland may be more negatively impacted by Brexit than other UK regions and have sent a strong message that they see avoiding a hard border with the Republic of Ireland and free trade with the EU as vital components of any Brexit negotiations. “I believe that the business community will press forward despite the perceived challenges. We hope that the local political parties will be able to resolve outstanding issues so that a Budget and a new Programme for Government be put into place which can give direction and clarity for Northern Ireland.” Independent economist Maureen O’Reilly, who formulated and analysed the survey of Northern Ireland’s Chartered Accountants said: “The survey results suggest that the broad view of members is that Northern Ireland’s economic prospects are weakening. “Most Chartered Accountants in the survey believe that the economy is either growing slowly or indeed stagnant and do not feel a strong sense of positivity a &WB&7V7G2FRV"VBǒ2W"6VBfWvp&7V7G22vB"&WGFW"V6W'FG@7F&ƗG&R6W'FǒvVvrFvfWw2&VBFRW&f&6RbFR6V6גFRV"FW&BV7B( ФWfFw2FR7W'fW6VFS( "cRfVVFBFRV6ג2w&vp6vǓ"Rw&vrFW&FVǓ#RfVVFRV6ג27FvB( "SRfVVFRWFf"FRV6אFRV"VB2( f.( #bRfVVFPWF2( .( B2R( fW'.( P6( vN( B"R( fW'vN( ( "'&WBv2&FVB2( 7G&vǒVvFf^( f FR6V6גFR6֖rV"'SSgW'FW"#RfWvVBB2( VvFf^( f7F"( "ƗF6V6W'FGvfW&V@7VFr7WG27&V6VB'W6W7267G2@&6rfFvW&RvƖvFVB07FrVvFfVǒFR6V6ג( "&VGV6VB6'&FF&FRf"@&frv&WFvW&R6FVB0FR7B6FfRf7F'2f"FR6V6גFRV"VB( "3R6'FW&VB66VFG2F'BFR7W'fWwwr'W6W76f'7FƖR6VS