Welcome rays of sunshine can offset a bleak 12 months

BELFAST BRIEFING:Northern Ireland has been battered by the recession, but there is hope for the future

NO ONE could disagree with Northern Ireland’s First Minister Peter Robinson when he says 2010 will be remembered most by the challenges the North’s economy has faced.

Robinson, who has presided over the Northern Ireland Executive as the local economy has sunk into a deep downturn, believes people in the North are “determined and strong in adversity”. He claims these qualities together with “hard work” will help Northern Ireland “weather the storm”.

But if in a parallel universe Robinson was chief executive of a listed company and delivering his end-of-year statement to shareholders, how would they feel about Northern Ireland plc’s latest performance?

For starters, the fact the “company” has seen a significant weakening of its position – unemployment for example is back to levels not seen since the Good Friday Agreement was signed – might not be warmly applauded.

Closer examination of the end-of-year report would show that between August to October of this year the jobless total in Northern Ireland soared by 6,000 to 63,000 while youth unemployment hit a 14-year high.

If this alone did not cause concern then official government statistics which show Northern Ireland plc’s growth rates have slowed dramatically would certainly set alarm bells ringing.

In 2008 growth averaged 2.3 per cent while latest data shows economic activity measured by regional gross value added fell to 2 per cent.

Across the UK as a whole there has been 17 months of growth. In Northern Ireland in the last 12 months business activity has declined.

Latest economic research from Ulster Bank suggests business activity last month fell again and at the fastest pace since April 2009.

Northern Ireland plc would of course be something of an anomaly when it comes to listed companies. Its chief source of revenue is from an arm of its parent company, the UK Treasury, which funds NI plc to the tune of about £9 billion every year.

This level of funding is set to be severely impacted by very real, group-wide budgetary cuts which will see NI plc’s top executives, (local ministers) for the first time since their appointment, take tough spending decisions.

Minister for Finance Sammy Wilson must, to borrow a line from the North’s draft budget for 2011-2015, allocate resources to “the highest priority areas and to areas where additional funds will yield the greatest economic benefit”.

It is a conundrum even seasoned corporate high-fliers would be hard pressed to solve.

Barely a single week has passed in the North in the last 12 months without a firm going into administration or going bust.

Although the construction sector and construction-related firms appear to be most affected, the severity of the downturn has been widespread.

The North’s largest locally owned bus company Chambers filed for administration, as did one of the best known names in the local upmarket fashion retail scene, Carter Clothing.

It has been a year which has seen many of the North’s longest established and outwardly solid companies cease trading.

But in the midst of the economic storm there have also been a few rare rays of sunshine.

Belfast based Andor Technology enjoyed one of the best financial performances of its 21-year history in the 12 months to September of this year and gave staff a share of a £1 million bonus.

It grew its adjusted pretax profits by 50 per cent to a high of £7.1 million and turnover by 29 per cent to £42.7 million.

Newry-based First Derivatives this month announced plans to create a further 40 jobs in a new research and development centre in Belfast and has also achieved record financial results and grown rapidly in 2010.

Northern Ireland has also enjoyed a number of new inward investment boosts in the last year.

The American banking giant Citi, which plans to create 500 new jobs in Northern Ireland over the next five years and the opening of NYSE Technologies’ new facility in Belfast, which could create up to 400 jobs, have proved welcome distractions from the general doom and gloom.

New firms have emerged and could enjoy a starring role in 2011. These include the likes of Lenis Aer, a University of Ulster spin-out venture, which has developed ground-breaking technology to help airlines become greener, and the Belfast-based Wee Man Studios, which develops iPhone and iPad games.

If 2010 proved to be one of the bleaker 12 months for the North, perhaps the next 12 will show there is everything to play for.