Posted on Thursday 16 May 2013 by Ulster Business

 Darren McDowell 2

Chartered accountants are overwhelmingly pessimistic about Northern Ireland's economic prospects in the year ahead, with the majority of the 400 polled in a new survey believing the region is still firmly in recession.

The Chartered Accountants Ulster Society found that 56% of those surveyed view prospects as poor or worse over the coming year and only 6% are optimistic about the year ahead with 38% uncertain as to how the economy might perform.

Of the 400 Chartered Accountants in practice, industry and the public sector, 83% said Northern Ireland was still in a period of recession.

The survey also showed that the timescale for economic recovery has slipped. In 2011 most members thought there would be economic recovery towards the end of 2012. Now half of those surveyed say that it will be beyond 2014 before Northern Ireland returns to positive growth. Only 5% of Chartered Accountants Ulster members believe that there will be a return to growth this year.

The results also show that Northern Ireland is becoming more disengaged from UK economic recovery, with 91% of Chartered Accountants believing that the Northern Ireland economy is performing worse than the UK. A greater impact from the property collapse is considered to be the major factor in this.

The top issues that respondents felt are contributing to uncertainty over the economy are political stability and a range of finance issues including availability of finance and a lack of working capital.

Most Chartered Accountants strongly believe that bank loans and overdrafts have become more difficult to obtain in the past year. Trade credit is also viewed as less available. Finance seems to be particular issue for small firms, the construction and services sectors. 85% of Chartered Accountants surveyed believe that businesses were putting investment or expansion plans on hold because they could not access finance.

Although none of Northern Ireland's business sectors are felt to have strong growth prospects in the year ahead, it is believed that IT, agriculture and exporters may have the best outlook. The prospects for the construction sector are rated poor by Chartered Accountants and the outlook for manufacturers is not viewed as particularly good despite the positivity around exporters.

The biggest challenges identified as barriers to potential export companies are identifying tangible export opportunities, availability of trade finance and a general feeling of risk aversion.

The survey also asked Chartered Accountants about business support structures in Northern Ireland. 63% of those surveyed believe that the Department of Enterprise, Trade and Investment (DETI) and the Department for Employment and Learning (DEL) should be merged into a single Department of the Economy; only 13% feel that they should remain separate. 49% of those surveyed feel that Invest NI should have a dedicated small business unit, 25% support a return to separate economic development agencies for large and small firms.

Darren McDowell, Chairman of Chartered Accountants Ulster Society which represents over 3,600 Chartered Accountants in Northern Ireland, said: "This survey shows that Northern Ireland's economic recovery has still some considerable way to go. Our members feel it may be 2014 or beyond before we see some positive growth. While there may be somewhat positive signs in IT, agriculture and for exporters, it looks as though the year ahead will continue to be challenging for local business.

"A key concern is that our members feel that the Northern Ireland economy is still firmly in recession, and that we are becoming disengaged from any recovery which may be taking place in the UK as a whole. There are significant levels of uncertainty about our economic future, and this uncertainty is holding back spending by consumers and investment by business in Northern Ireland.

"We are disappointed that the Government hasn't delivered on a lower rate of Corporation Tax for Northern Ireland and we hope that work is still continuing in the background to produce economic measures which can provide a real stimulus. While we hope that a change in Corporation Tax will still be deliverable in the medium term, our members feel that initiatives such as an increase in capital spending, freezing rates to business and schemes to support exports are needed to help spark the recovery.

"The respondents to this survey are a great representative sample of our economy and we feel it's a significant cross-section view of how our business sector is currently feeling. The clear message being sent is that there are still significant challenges to meet before we start to enter recovery and we must do everything we can to assist those businesses out there who are working hard to survive and to grow."

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