Manufacturing NI Chief: We Must Address Our Competitive Disadvantage

The competitive disadvantage facing Northern Ireland manufacturers must be addressed if the sector is to improve, it has been claimed.

The manufacturing sector in the UK as a whole is struggling. In December, the sector fell to a three-month low of 52.5, from 53.3 in November, the CIPS/Markit purchasing managers’ index survey said.

For the fourth quarter, the performance of the sector was at its lowest level in a year-and-a-half.

The trend is reflected in Northern Ireland’s manufacturing sector which is seeing a decline in the number of exporters. Stephen Kelly, chief executive of Manufacturing NI, pointed out that manufacturing figures here were dependent on the prowess of a small number of firms.

Mr Kelly said: “The most recent manufacturing export statistics show that whilst the headline figure is positive, when you get beneath the figures it is made up of a number of big firms making big sales.”

According to NI Chamber of Commerce, manufacturing exports from Northern Ireland rose by almost 9% in 2013-14 to £6bn.

However, large firms accounted for almost all of that growth, with their exports rising by 15.4%.

Large companies make up 60% of Northern Ireland’s manufacturing exports, the Chamber has said.

Mr Kelly said there were two reasons why manufacturers had not all enjoyed a successful year.

“The eurozone isn’t growing, so demand is low. In addition, the current sterling gains against the euro have not been seen for the last five years. It is increasingly difficult for Northern Ireland manufacturers to win contracts in Europe, where price is so sensitive.”

For the manufacturing sector in the region to grow, the competitive disadvantages of doing business in Northern Ireland must be addressed, Mr Kelly said.

“At the core of it, in Northern Ireland we have some great companies, with great products, and great people.

“That will always be attractive to customers.

“We need to tackle our competitive disadvantages to give our companies he best chance to be successful. We need to look at the cost of doing business here, and make sure the likes of Invest NI in its new budget are able to support the growth of our existing business.”

ING Bank economist James Knightley said the latest figures showed “that the long hoped-for economic rebalancing story is not playing out as envisaged”.