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13/01/2022
Majority Of NI Companies Expect Business To Grow In 2022
The majority of companies in Northern Ireland expect their businesses to grow in 2022, according to latest Quarterly Economic Survey from NI Chamber and BDO.
The survey found that despite the positive signs, inflationary pressures from mounting business costs including high raw material costs and pressure to raise wages are causing significant concern, particularly for manufacturers. Expectations to raise prices are highest on record with a greater share of businesses in Northern Ireland expecting to raise prices in the next 3 months compared to all other UK regions.
Reporting on the Survey, BDO said: "After reaching record lows across all key indicators in Quarter 2 2020 with the onset of the COVID-19 pandemic, almost 2 years on all key indicators are positive meaning more firms are reporting increases in sales, employment, confidence around turnover growth and investment intentions than those reporting a fall. By comparison, just one year ago in Q4 2020, almost all key indicators were negative. The share of businesses operating at full capacity rose to 45% in Q4 21 (39% Q3 21) for manufacturing and 50% for services (47% Q3 21) although over half of businesses are still operating below capacity. One in 3 firms however still remain negatively affected by the pandemic and 16% are just covering costs or are in difficulty. EU exit has also presented a new set of challenges in 2021 with largely negative trading consequences over the last year.
"Despite this, more businesses are reporting increased UK sales (35%) in last 3 months compared to those reporting falling sales (18%). This is also the case with domestic order books for the next 3 months although the difference is less marked (31% report increased UK orders vs. 25% falling orders). Confidence is keeping up in spite of challenges, particularly around pressure to raise prices. Expectations to raise prices are highest on record (74% expect to raise prices in next 3 months) driven in large part by high raw material costs. Almost 2 in 3 (64%) members cite rising raw material costs as the main reason why they expect to raise prices.
"Recruitment activity is continuing, however with that come challenges around getting staff as recruitment difficulties persist. Firms are increasingly under pressure to raise wages to retain and recruit staff, although investment in training has been picking up as a result."
In total. 215 members responded to the NI Chamber of Commerce & Industry Quarterly Economic Survey (QES), in partnership with BDO, for the 4th quarter of 2021. Together they account for over 26,000 employees in Northern Ireland.
Welcoming the findings of the Survey, Economy Minister Gordon Lyons, said: "I very much welcome the findings of the latest NI Chamber and BDO Quarterly Economic Survey. The report shows that, despite significant continuing pressures, confidence is high amongst NI businesses, with most expecting to grow in 2022 and recruiting new staff. This is testament to the resilience and innovation of our local business community.
"My Department's Economic Recovery Action Plan has played a key role in helping businesses sustain, recover and flourish during the pandemic. The ERAP funded a range of support schemes, including the High Street Scheme that injected over £136million into our retail and service sectors, as well as grant schemes for businesses and funded training places to help people upskill for the evolving jobs market.
"I look forward to a positive 2022 for the NI business community."
The survey found that despite the positive signs, inflationary pressures from mounting business costs including high raw material costs and pressure to raise wages are causing significant concern, particularly for manufacturers. Expectations to raise prices are highest on record with a greater share of businesses in Northern Ireland expecting to raise prices in the next 3 months compared to all other UK regions.
Reporting on the Survey, BDO said: "After reaching record lows across all key indicators in Quarter 2 2020 with the onset of the COVID-19 pandemic, almost 2 years on all key indicators are positive meaning more firms are reporting increases in sales, employment, confidence around turnover growth and investment intentions than those reporting a fall. By comparison, just one year ago in Q4 2020, almost all key indicators were negative. The share of businesses operating at full capacity rose to 45% in Q4 21 (39% Q3 21) for manufacturing and 50% for services (47% Q3 21) although over half of businesses are still operating below capacity. One in 3 firms however still remain negatively affected by the pandemic and 16% are just covering costs or are in difficulty. EU exit has also presented a new set of challenges in 2021 with largely negative trading consequences over the last year.
"Despite this, more businesses are reporting increased UK sales (35%) in last 3 months compared to those reporting falling sales (18%). This is also the case with domestic order books for the next 3 months although the difference is less marked (31% report increased UK orders vs. 25% falling orders). Confidence is keeping up in spite of challenges, particularly around pressure to raise prices. Expectations to raise prices are highest on record (74% expect to raise prices in next 3 months) driven in large part by high raw material costs. Almost 2 in 3 (64%) members cite rising raw material costs as the main reason why they expect to raise prices.
"Recruitment activity is continuing, however with that come challenges around getting staff as recruitment difficulties persist. Firms are increasingly under pressure to raise wages to retain and recruit staff, although investment in training has been picking up as a result."
In total. 215 members responded to the NI Chamber of Commerce & Industry Quarterly Economic Survey (QES), in partnership with BDO, for the 4th quarter of 2021. Together they account for over 26,000 employees in Northern Ireland.
Welcoming the findings of the Survey, Economy Minister Gordon Lyons, said: "I very much welcome the findings of the latest NI Chamber and BDO Quarterly Economic Survey. The report shows that, despite significant continuing pressures, confidence is high amongst NI businesses, with most expecting to grow in 2022 and recruiting new staff. This is testament to the resilience and innovation of our local business community.
"My Department's Economic Recovery Action Plan has played a key role in helping businesses sustain, recover and flourish during the pandemic. The ERAP funded a range of support schemes, including the High Street Scheme that injected over £136million into our retail and service sectors, as well as grant schemes for businesses and funded training places to help people upskill for the evolving jobs market.
"I look forward to a positive 2022 for the NI business community."
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