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GOLDBLATT McGUIGAN BUSINESS SURVEY

COMMENTARY:

Tom Lenehan, Director, Corporate Finance, Goldblatt McGuigan

While official statistics suggest that the UK economy has emerged from recession, the Northern Ireland business community is unconvinced and remains cautious about the impact and timing of any recovery in 2010.

That is the business mood that emerges from the findings of the latest Goldblatt McGuigan Business Survey, conducted exclusively for the Business Telegraph.

Commenting on the findings Tom Lenehan, Director, Corporate Finance, Goldblatt McGuigan said -

“It is interesting that in stark contrast to official UK economic statistics issued last week, none of the businesses surveyed expect to see evidence of local economic recovery in the first Quarter of 2010.  While 25% expect recovery in Quarter 3, the majority, 52%, do not expect the local economy to emerge from recession until 2011.   Likewise, the ‘green shoots of recovery’, that have been much trumpeted nationally are less evident locally with 29% of businesses having seen some evidence but 44% still waiting for the shoots to appear 

 When asked about their sales performance in 2009, 66% of businesses stated that they had either experienced a minor decline (37%) or a major slump (19%).  It is encouraging, therefore, to see 51% of businesses saying that they are confident about their prospects in 2010.  This level of optimism, however, is tempered by the 39% who are not confident and the worrying 5% who said they were very concerned about their prospects for the year ahead.

 It will surely surprise no one to see lack of sales (46%), the impact of competition and discounting (32%), cash flow problems (32%) and reduced profitability (17%) cited as the biggest challenges currently facing local businesses.  These are very obviously ‘cause and effect’ issues with competitive pressures on sales volumes and prices being the critical factor. 

 On the employment front there is, again, some signs of optimism with 24% hoping to increase the number they employ during the year and the majority (61%) planning to maintain their current employment levels.  The lag between the job market and the first reports of recovery mean that 15%, of businesses still expect to lay off staff during 2010.  This is a worryingly high figure and for these businesses the end of recession is still not in sight. 

 In conclusion, while it is clear that the local business community does not consider itself out of the woods recession-wise yet there are signs of hope on the horizon.  Shoots of economic recovery are emerging and for some this will bring growth in 2010.  For others, however, the prospects for the year at best uncertain and at worst bleak.  For these businesses, the recent hype about economic recovery must surely be hard very hard to believe.” said Tom Lenehan.

The Goldblatt McGuigan Business Survey was conducted between the 18^h and 22^nd January 2010 by email and follow-up telephone interview amongst a sample of 155 local businesses representing a cross section of private sector enterprises, large and small. 

What the businesses said........  

Peter Dixon, Group Chief Executive, Phoenix Energy Holdings

 “One of the biggest challenges facing our business is Government red tape.  While we enjoyed strong growth in 2009 and look forward to 2010 with confidence, Government bureaucracy is restricting our growth”

 Dermot McIlroy, Owner, McIlroy Musical Instruments

“Keeping up with the demand for our products is my biggest challenge.  We manufacture approximately 80 high top quality guitars a year but the international demand is such that we could sell hundreds.  We have already sold our production capacity for 2011”

 Colin Reid, CEO, Consilium Technologies

“As providers of IT solutions to Local Government and Social Housing Bodies we expect 2010 to be challenging in terms of a reduction in public expenditure levels.  That said, our software can directly save customers significant amounts of money, without compromising service. Therefore, we are committed to the continued development of our business and our skills base and plan to increase our employment levels during the year”

 

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