News And Events
Goldblatt McGuigan Business Survey
Tuesday 29 June 2010
Commentary (Sam Goldblatt, Partner, Goldblatt McGuigan
The majority of the local business community do not expect last week’s Emergency Budget to have a positive impact on the prospects for their business or for the recovery of the Northern Ireland economy.
That is the findings of the latest Goldblatt McGuigan Business Survey conducted exclusively for the Business Telegraph amongst a sample of 115 local businesses.
62% of respondents said that they believed the measures announced in the Budget would have either a negative impact (47%) or no impact (15%) on the prospects for their business while 38% said they expected the impact to be a positive one.
Looking at the likely impact on the Northern Ireland economy as a whole, while 31% of the businesses surveyed said that they thought the Budget would lead to the recovery of local economy, 69% of the businesses surveyed either said it would not (42%) or were undecided as to the likely economic impact (27%).
Commenting on the findings of the Survey, Sam Goldblatt, Partner, Goldblatt McGuigan said he was not surprised to see the local business community giving the Budget a less than positive review
“It is clear that from the findings of the Survey that the majority of local businesses see the measures announced in last week’s Emergency Budget at best as broadly neutral with no real positive benefits for their businesses.
Given that so many companies are struggling to make a profit in these challenging times, the reductions in Corporation Tax will have little positive impact in the short term.
The increase in VAT from 17.5% to 20% is a major concern particularly for those businesses involved in retailing, hospitality and leisure and the provision of services to the non- business consumer. There is obviously widespread concern that the resultant increases in costs will significantly reduce consumer spending power and that this, coupled with the 2 year Public Sector pay freeze will give rise to a slow-down in economic activity. .
One cannot help but conclude that his Budget will have the effect of dampening the economy and it is clear from the findings of this survey that the local business sector is expecting tough times in the short term and see any economic recovery as a longer term prospect” said Sam Goldblatt.
The latest Goldblatt McGuigan Business Survey was conducted on Thursday 24th June by email and telephone. The 115 businesses who responded represent a cross-section of the local business sector and include manufacturing, service and construction companies large and small.
What The Businesses Said
Stephen Magorrian Managing Director, Botanic Inns (Operators of 16 premises in the pub, hotel and off-sales sector)
“My biggest concern is the increase in VAT. All our costs will go up and as a result, we will have to increase our prices. This will inevitably have an impact on trade as quite simply, people will have less cash.
The impact of Vat and rising prices will also make us less attractive to tourists, particularly from the Republic of Ireland, and this will be detrimental to the economy”.
John McMullan, CEO, Bryson Charitable Group (operate a range of social economy businesses)
"This Budget was more about reducing UK borrowing and debt than economic growth.
The perverse nature of the Budget's regressive aspects generates a growing demand for charitable services - greater unemployment higher levels of fuel poverty. Additionally, as VAT increases we expect higher demand for our refurbished white goods and the price for recycled materials should remain buoyant as industry sources them as cost effective raw material for local re-manufacture.
We view our prospects as positive and expect in-year growth but the real bite of this budget will become clear in November when the full shape of public spending cuts are announced, so until then we must remain undecided on its impact on a recovery."
Simon Bruce, Partner, 2b Creative (graphic and digital design consultancy)
“After a rough calculation, my business will be £3000 a year worse off or £250 a month. Assuming that this can be taken as a bench mark for a lot of small businesses there must be a lot of business owners who, like me, are relieved that the impact of this Budget will not require them to make swathing cuts to manage the impact. Paying a little closer attention to the pennies is no bad thing either.
As for the 2 year Public Sector Pay Freeze, surely with a guaranteed salary each month, career break options, flexible working time, no suppliers to pay, no cashflow issues, no staff to pay, no VAT and tax returns, no legal responsibility for policies on harassment/health and safety/equality in the workplace, etc a pay freeze in order to secure future employment is a very small price for those in the Public Sector to pay.
In summary, everyone is having to make a contribution. Those who moan and groan about being a few pounds worse off each month for the next 4 - 5 years really need to question their own sense of public responsibility. This Budget can challenge people in ways that should stimulate business and economic growth, it was a million miles away from being punitive”.