The news that up to 400 jobs could be lost following the decision by Coats Viyella to close its factory in Derry is another blow to a city which was once a major centre for Northern Ireland's clothing and textiles industry.
A number of major employers have ceased trading in the area in recent years. The past 12 months alone have seen the closure of the City Shirt Company - Derry's oldest shirt manufacturer - with the loss of nearly 200 jobs, and of shirt and pyjama manufacturer H.G. Porter in nearby Strabane, where 126 people were laid off. In all, the clothing and textiles industry, one of the largest manufacturing employers in Northern Ireland, shed more than 2,000 jobs last year. Despite this, it continues to employ around 23,000 workers throughout the North and accounts for around 40 per cent of Derry's manufacturing workforce.
"It's a sector in transition," says Mr Mark Lusby, the economic development officer with Derry City Council. "But we still have large and profitable companies like Desmonds and Adria, which play a very important part in the local economy. He said that some of the recent investment has been in plant and equipment, and in improving skills within the workforce, "to make it less likely that production will be shifted to lower wage economies". Adria has several factories in Northern Ireland. Its Strabane plant supplies hosiery to retail chain stores. Desmonds is one of Northern Ireland's largest private sector employers. Its nine factories across the north-west employ some 3,000 staff, working exclusively for Marks & Spencer, supplying a range of leisurewear, outerwear and nightwear. Despite the decline in demand for Marks & Spencer products, Desmonds denies that its dependence on M & S is a risky strategy.
Even so, Desmonds has also felt the effects of the downturn in Marks & Spencer's fortunes. Last year it was forced to close its factory in Magherafelt, Co Derry, with the loss of 90 jobs; another 40 people were laid off at its factories in Derry and Dungiven. A decline in M & S orders had already been responsible for the loss of 225 jobs in November 1998, the job losses were spread across Desmonds' factories in Derry, Tyrone, and Fermanagh.
Mr John Rubery, of the Northern Ireland Textile Association, says that not much more than a decade ago, Northern Ireland was the shirt capital of Europe, but that since the late 1980s, the industry has been in decline.
"Labour and energy cost more in the west than in the developing countries. In the UK, this has been compounded for the last few years by the high rate of sterling."
The strength of sterling is a serious problem for Northern Ireland industry.
Mr Alan McClure is the president and chief executive officer of the medical packaging company Perfecseal, a subsidiary of the giant Bemis Corporation, which has a turnover of around $2 billion (€3.28 billion).
"More than 75 per cent of our output is exported," Mr McClure said, "which means we have to invoice in euros. We can't raise our prices to compensate: all we can do is try to make ourselves more and more efficient. But you can only do that for so long."
Mr McClure, who is a former chairman of the Institute of Directors in Northern Ireland, takes over today as president of the Derry Chamber of Commerce.
"In Derry, we are at the stage where a lot of the old industries are gradually being replaced by newer, high-tech companies," he says. "It's going to be a tough journey, but I believe that we are on the right track."
While recent headlines have been about factory closures, the city has changed dramatically in recent years. There has been a spate of new upmarket residential developments, as well as new stores and supermarkets, including Sainsbury and Tesco. A new freight terminal has been built on the River Foyle at Lisahally, while money has also been spent on new runways at the city's airport.
A number of high-tech companies have emerged, among them the disk drive manufacturer Seagate Technologies, which opened its first factory on the Springtown Industrial Estate in 1993. The company now employs more than 1,000 people in Derry, and another 800 at its factory in nearby Limavady.
Stream International, which provides on-line technical support services to customers such as Dell, Hewlett Packard and Microsoft, is to double its workforce to more than 500 over the next 18 months. BT has opened a call centre which could end up employing 600 people, while another relatively recent arrival is the US computer and electronics firm Raytheon, which is creating at least 150 jobs as part of a new software development programme.
Local accountant and business consultant Mr Gerry Murray believes that the area could have looked forward to even more inward investment but for the collapse of the peace process.
"The lack of political stability is a major problem for us," he says. "It makes this a less attractive place to inward investors, and it's stifling our potential."
Derry has established strong links with the city of Boston over the years, mainly through the efforts of local MP Mr John Hume, and organisations like Derry Investment Initiative. The city's allure for US investors is nothing new. Chemical firm DuPont established its factory on the edge of the city in the 1950s, and the £78 million it spent on its Lycra plant in 1997 brings its total investment at its Maydown site to almost £500 million.
The plant also manufactures Kevlar and Neoprene, and currently has a workforce of around 1,000 people.
