After a significant drop across all indicators in Q3 22, business performance in Northern Ireland during Q4 22 remained steady, albeit at a very weak level, according to the findings of the latest Quarterly Economic Survey (QES) report for Q4 22, published Thursday 12 January by NI Chamber and business advisers BDO NI.
The weakness in recent business performance persisted in Q4 2022 but hasn’t shown any further signs of deterioration. Q4 2022 QES findings suggest that signs of slowdown in demand evident in the last few quarters have continued, with 2 in 3 members stating that demand for their goods and services is falling, although for most only a little. 55% of members believe their business will grow in 2023 although a sizeable minority of 33% expect it to contract.
Inflationary pressures still dominate member concerns driven by a plethora of cost challenges including rising utility, labour and fuel costs and for manufacturers persistently high raw materials costs. This has placed significant pressure on firms to raise prices although it is notable that while still high, fewer manufacturers are reporting pressure to raise prices than a year ago. These cost pressures are putting significant strain on an already fragile cashflow position and business profitability with more businesses reporting that they see profitability falling over the next year than those reporting any rise. This quarter members are expressing
greater concern over interest rates reflecting the impact of the significant interest rate hikes introduced by the Bank of England over the last 10 months on the cost of borrowing. Despite these challenges, most businesses suggest they are currently trading well (31%) or reasonably (49%). Recruitment is still taking place in both sectors but with that the persistent challenge of finding staff, a factor influencing rising labour costs.
In total, 160 members responded to the NI Chamber of Commerce & Industry Quarterly Economic Survey (QES), in partnership with BDO, for the 4th quarter of 2022.
The fieldwork for the Quarter 4 22 survey took place between 21 November and 5 December 2022. The war in Ukraine was officially confirmed on the 24th of February 2022. The infamous ‘mini budget’ took place on the 23rd September 2022. Rishi Sunak became the new Prime Minister on the 25th October 2022. The Autumn Statement was announced on the 17th November 2022.
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