Euro shopping bright spot amid gloom

FOR A brief moment one warm, sunny, spring day in 2008 it appeared as if Northern Ireland finally had the long-awaited goal of economic prosperity in its sights, writes Francess McDonnell

A much-heralded investment conference had brought scores of influential senior American executives to the North to hear about new business opportunities.

For three days the US visitors were wined and dined from Stormont to Hillsborough Castle, charmed by the North's smiling politicians and promised an investment opportunity second to none. The then first minister, the Rev Ian Paisley, and deputy first minister Martin McGuinness very successfully conveyed a picture of a new Northern Ireland - one that could work together to provide a safe and prosperous location for potential investors.

Around 150 business leaders representing 90 companies took part in the US:NI Investment Conference. The conference may have been little more than a public relations exercise on the part of the Northern Ireland Executive, but it generated a limited feelgood factor for the local economy at the time.

Investment announcements during the conference included one from Bombardier Aerospace, a long-time investor in the North, which unveiled plans for a £70 million investment at its Belfast plant. US firm CyberSource announced its decision to develop a new research and development centre in Belfast which would create 56 jobs.

On the surface, the conference implied that perhaps 2008 really was the year Northern Ireland would make good on the endless promises of a new economic prosperity. However, away from the cocktails and canapes of the conference, there were signs that the North's economy was already struggling. House prices were falling sharply and unemployment numbers were creeping up.

The Executive had vowed that growing the economy would be its top priority during 2008. Over the last 12 months the North secured a number of significant new inward investment projects, including the biggest ever single investment by a company in the North. Bombardier's announcement in July that it intended, on top of existing commitments, to invest £500 million in its Belfast operations to build a new aircraft was a milestone for the North.

But despite this huge vote of confidence, Northern Ireland could not hope to match the level of investment needed to offset the sharp rise in job losses which began to gather pace as each month passed.

Investments such as Schrader's £4.6 million package for its plant in Carrickfergus, Michelin's £14 million boost for its factory in Ballymena, and Citigroup's fourth investment in the North, which promises to create 145 additional jobs, were all welcome, as was Kerry Foods £2.9 million investment to expand its Enniskillen operations and the £6 million investment by Mayo-based Western Brand Poultry at its operation in Lisnaskea, Co Fermanagh.

But it was investment commitments like those of India-headquartered Firstsource Solutions that Northern Ireland desperately needed during 2008. The company confirmed investment plans which would create up to 800 additional jobs in the North.

But other existing investors - such as Fujitsu Services, who announced a further £8.8 million investment that would create 150 additional jobs in Belfast and Derry, and the US global medical devices manufacturer CaridianBCT - failed to balance the downturn in the jobs market.

CaridianBCT unveiled plans to inject a further £16 million into its Larne facility in September which will to lead to an important 235 additional skilled jobs being created over the next three years.

But elsewhere in Limavady, in the same month, Seagate Technology closed the doors for good on its plant, which had employed nearly 1,000 people.

Martin McGuinness had told the American delegation that "the old days are gone, the old days will never return" in the North.

But barely a month later the Executive was locked in yet another stalemate and Northern Ireland found itself without political leadership as the economic downturn grew more severe. By the time the politicians got back to business Northern Ireland was technically in recession and house prices had dropped by more than 40 per cent in some areas.

The latest figures show the unemployment rate now stands at 4.3 per cent, but more worrying is the rate of business failures and the number of companies who have been forced to cut jobs.

Property and construction companies were among the first casualties. Firms such as Belfast-headquartered Taggart Holdings, which were forced to call in administrators to find a way to restructure the group, highlight the extreme difficulties in a once-flourishing sector.

Although hundreds of businesses have struggled during 2008 there are a notable few who have also celebrated success.

First Derivatives believes the downturn may actually boost its business. The Northern Ireland financial software company, which provides specialist consulting services, enjoyed a 21 per cent jump in both pretax profit and turnover in the six months to August 2008.

Historically strong companies such as Ballymena-based builders, Wright Group, have also shown that with the right product, determination and luck, businesses can flourish even in difficult markets.

There has also been no cause for complaint about business from retailers in Border cities during the last 12 months. Retailers have enjoyed a bumper year thanks to the influx of euro shoppers from across the Border.

Belfast's newest five-star shopping destination - the £400 million Victoria Square, which opened during 2008 - has also enjoyed a major boost thanks to the strength of euro against sterling.

The euro-based shopping frenzy which some parts of Northern Ireland have enjoyed over the last 12 months can provide a cure for the current malaise in the North's economy. But several of its most significant manufacturers, from FG Wilson to Powerscreen, have been forced to introduce significant redundancy and plant shutdown programmes. They for one will have had no problem bringing the shutters down on 2008.