New Year Reset

After all the indulgence and extravagance of the holiday season, January is typically a time for a reset. The month-long festivities have become a distant memory and the only glasses being raised contain bright green blends of broccoli, kale and spinach.

While there may be wishful attempts to shed the Christmas lbs, the efforts made to hang on to whatever pounds are left over from the January paycheque will, we expect, be longer-lasting and more determined.

As far as economic hangovers go, this current period cannot be assuaged by a couple of aspirin and a chippy tea and many project the hammering headache will linger for most of the year.

The positives in the economy – locally, nationally and globally – seem to be in short supply with the Chancellor and Andrew Bailey hanging on to their party pooper personas. Jeremey Hunt has called for more taxes and at the Bank of England, it seems unlikely that December’s ninth consecutive raising of interest rates will be the last.

The majority of PMIs around the world have dipped below the 50 expansion/ contraction threshold and all 12 UK regions posted falling private sector output for the second month running in November.

For Northern Ireland, this represented the seventh successive month of falling output and new orders.

Local firms are being battered with inflationary pressures while still having to contend with all of the other challenges which dominated so much of the last 12 months including labour shortages, supply chain disruptions and a sustained global slowdown.

Add political instability at almost every level to this mix and it makes for a tough trading period. The big question is whether or not political turbulence will spill further into market turbulence and unless someone steadies the ship, can firms navigate their way through this?

The lack of an NI Executive is deepening business concerns and while the Secretary of State is committed to his carrot-and-stick approach to get this back up and running, would a return to full pay for our MLAs really be worth returning to what can only be described as an in-tray from hell.

Other big issues looming large include the reversal in fortunes of the housing market, rising temperatures, the energy crisis and the ongoing conflict in Ukraine. We wait to see the full impact of industrial action and whether or not this will influence Hunt in any way when it comes to setting out his Budgets and Autumn Statements.

As we wait to see how each of these issues unfolds, it is important to hold on to some degree of optimism. As ever, some light has managed to peek through the dark clouds and regardless of how tough things are economically there will always be companies doing well.

Thankfully we can point to a number of home-grown companies who are worldleading in tech and pharma. Companies like First Derivatives, Randox, Almac, Norbook, Kainos and STATSports, whose exporting prowess and employment growth have been so important to the local economy, are likely to be winners through this recessionary period.

The agri-food sector, too, tends to perform well even amidst the threat of recession. The NI protocol has given firms such as Fane Valley and Moy Park a significant pick-me-up; however, more clarity on regulations would support this industry even further.

Maximising opportunities between NI and the EU while minimising disruption between local organisations and GB would significantly ease some of the major concerns around the protocol and as negotiators recommence their discussions, this would certainly be a positive resolution to make.