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Business Day Thursday, 7 November, 2002, 09:27 GMT
Business fears over political uncertainty

Business leaders in Northern Ireland believe continued peace and political stability are critical to the well-being of the economy, according to a poll carried out for BBC NI's Business Day.

Three quarters of chief executives polled said the collapse of the Good Friday Agreement would weaken business confidence, while a majority warn of job cuts and reduced investment if violence increases.

They also cited peace and political stability as overwhelmingly the most important factors to stimulate the Northern Ireland economy.

In total, 500 chief executives of companies employing more than 10 people were polled for Business Day on Thursday by PriceWaterhouseCoopers.

Business leaders appear to be strong supporters of devolution - with almost 80% saying an assembly was the best option for running the economy - while two thirds also favour closer ties to the Republic of Ireland's economy.

In terms of general business confidence there appears to be some caution about the next 12 months.

However, in the longer term, there seems to be more optimism, with almost 60% of those questioned expecting their business sector to grow over the next five years.

The poll paints a picture of a business community that is very clued in to the political and economic climate in which it is operating.

Political uncertainty

Some business sectors have clearly been feeling the chill winds of recession, while executives in others, who have perhaps escaped the worst of the downturn, have been reading the gloomy headlines and perhaps reacting to them as much as to the realities of their order books.

The continuing political uncertainty is obviously affecting sentiment as well, and there are signs that those firms which are warning of cutting back on investment and jobs are the very sectors that would be expected to provide the most growth.

Stephen Kingon, managing partner of PriceWaterhouseCoopers, said if direct rule continued indefinitely, the outlook could be bleak.

"The short-term prognosis is that business confidence has dropped again to pretty low levels," he said.

"Chief executives have indicated that that will manifest itself in deferring investment rather than cancelling it.

"But it will also impact on job closures and redundancies."

But what is at least encouraging in the survey is that most businesses do see an end to current difficulties, and expect growth in the medium term.

When it comes to business-related issues that affect firms' performance there is overwhelming support for the idea of letting businesses keep more of their profits instead of giving them grants, something that may give local policymakers food for thought.

While 70% of chief executives believe the education system provides them with recruits that have good educational qualifications, there is one worrying outcome.

Almost half of companies say that the education system is not providing recruits with some of the "business-ready" skills they need such as communication and team working.

Direct rule disappointment

Denis Rooney, a chartered surveyor and chairman of the Institute of Directors said the results of the survey tallied with his experience.

"Every time we deliberate on what needs to be done for the economy, peace and stability is number one on the list," he said on BBC Radio Ulster.

Businesswoman Teresa Townsley, a former member of the Industrial Development Board said: "There is good business recovery at the moment, but it is fragile. We need a good political process to maintain that stability and grow the economy."

She added that business leaders were dismayed to see devolution suspended last month because of the latest political crisis.

"If you have a local minister they are aware of the local issues and what is happening on the ground. You are not being looked after from a distance," she said.

Mr Rooney agreed that business had "preferred the devolution experience" over direct rule from Westminster.

"The access to the decision-making process through the ministers was much greater and business felt more involved in that process," he said.

On BBC NI's Business Day on Thursday, you can have your say on this crucial question.

You can vote by phone, text or e-mail - call 08000 322262 to register a vote by phone.

Alternatively, call 07764 355 202 to text your vote, or e-mail it to

Phone and text lines open at 1700 GMT on Thursday and the results will be announced live on It's Your Business on BBC One Northern Ireland television that night.

BBC NI business editor James Kerr:
"Business leaders cite peace and political stability as the two key factors needed to stimulate the local economy"
Stephen Kingon of PriceWaterhouse Coopers:
"The short term prognosis would be that business confidence has dropped"
See also:

05 Nov 02 | Business Day
18 Oct 02 | N Ireland
15 Oct 02 | N Ireland
14 Oct 02 | N Ireland
14 Oct 02 | N Ireland
02 Oct 02 | N Ireland
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