The decline in the value of the euro against sterling "is hurting manufacturers, retailing, tourism, farming - and it's wiping out petrol stations," says Mr John Stringer, president of the Northern Ireland Chamber of Commerce.
The result of sterling's rise to 20-year highs against the pound is falling profit margins and huge losses in competitiveness for Northern services, manufacturers and retailers.
"I think Northern Ireland has been quite resilient up to now, but profit margins are being eroded," says Mr Stringer. "In the short term, this currency fluctuation has been OK, but down the road it is a much sadder prospect," he says.
"It is catastrophic for retailing, especially in the Border towns of Eniskillen, Newry and Derry," he adds.
Pre-Christmas promotions offering goods worth £1 sterling for £1 were very effective in getting shoppers into Newry, but with the recent fall in the value of the euro, traders who continue with this strategy are now incurring a 25 per cent cut in margins, according to Mr Brian Gallagher, manager of Cash and Carry in Newry.
"You can see the difference before and after Christmas, and now businesses are being hit hard," says Mr Gallagher. "We do a lot of our regular business with buyers across the Border, but now they just can't afford to buy up here."
Although, he says, it is too early to put a figure on the loss of turnover, Mr Gallagher says the drop in deliveries has been very noticeable.
In contrast, Dundalk is proving so popular with Northern shoppers that restricted parking areas are clogged by Northern-registered cars. The local authority recently had to step up a clamping campaign to keep the traffic moving.
"Dundalk is booming. We would have had a tradition of people from the North coming across the Border, but sterling is a big contributing factor now," says Mr Vincent Duffy, chairman of Dundalk Retailers' Association. The currency fluctuations are hitting manufacturers in the sterling zone particularly hard. Mr Duffy used to be supplied by some British manufacturers, but 18 months ago cancelled all of these in favour of suppliers based in the euro zone. "It is too risky when you are buying ahead," he says. "And I can't see it getting any better over the next three or four years because I just don't see Britain entering the euro zone."
To avoid the weak euro, many companies in Northern Ireland are now looking for markets outside the euro zone. But this could have long-term consequences, says Mr Stringer.
Many long-established supply chains and business patterns have already been undermined by the meteoric rise in sterling.
The strength of sterling is also having an impact on entertainment and leisure preferences.
A weekend break in Dublin is competitively priced compared to a weekend in Northern Ireland. And the added draw of a greater choice of affordable shopping and entertainment is having a significant effect on cross-Border travel.
"People are taking weekend breaks in the South now, whereas before they would have gone somewhere in the North. It's permeating every part of Northern Irish business," says Mr Stringer.
Whereas a few years ago, the majority of passengers using the Enterprise cross-Border rail service travelled South to North, the currency fluctuation has led to a sizeable number travelling in the opposite direction, according to a spokesman for CIE.
Perhaps the most visible signs of the damage done by strong sterling are the abandoned petrol stations which line roads north of the Border. Petrol retailers have been hit particularly hard by the combination of currency fluctuation and a higher level of duty on fuel in Britain. The Northern Ireland Petrol Retailers' Association (PRA) estimates that between 50 and 60 petrol stations have gone out of business in recent years, mainly due to increased competition from the Republic.
Mr Romy Morrow, who ran a petrol station near Bessbrook in Armagh, finally succumbed to the inevitable and sold his petrol pumps and canopy a few weeks ago. "The situation was I just had to get rid of it. Unless you want to break the law, you can't sell petrol here. We were starting to lose £2,000 a month on our petrol operation," he says. But the difficulties caused by huge price differentials are creeping ever closer to the heartland of Northern Ireland. Mr Thomas Palmer, chairman of the PRA, owns a service station in Lisburn, almost 30 miles from the Border. But because he is on the main Dublin/Belfast road, he has seen a 30 per cent drop in revenue over the last year.
"People see it as an all-inclusive package now," he says. "They cross the Border to buy petrol and then go shopping in one of the Border towns," he says. The currency situation also makes petrol and diesel smuggling more attractive. The Customs and Excise service in Northern Ireland estimates that smuggling is costing at least £100 million (€162.81 million) annually.
According to a spokesman, 1.3 million litres of fuel was seized last year and those arrested admitted to smuggling a further 29 million litres. The actual amount of fuel smuggled is likely to be many times this amount. The Northern Ireland Minister of Finance, Mr Mark Durkan, acknowledged last week that the strength of sterling was a major issue for Border regions. He said several government departments were looking at possible measures to mitigate the problem. However, he said, this was not going to be easy, due partly to the lack of fiscal discretion available to the Executive and also to the fact that using public expenditure would not be particularly effective anyway.
