Economic activity in Northern Ireland experienced a growth of 2.3% in the year leading up to June, outpacing both the United Kingdom and the Republic of Ireland in the second quarter. This economic expansion, broadly equivalent to UK Gross Domestic Product (GDP), was primarily driven by an increase in the production sector, which includes manufacturing.
While these figures suggest a strong economic position for Northern Ireland at the end of the first half of the year, businesses are voicing concerns about the impact of rising energy and food costs. These escalating expenses are expected to place significant pressure on companies in the coming months.
Greg Bradley, founder of BLK BOX, a gym equipment manufacturer based in Newtownabbey, reported that his company has secured international contracts with prominent clients, including sports teams and gym chains. Bradley noted that the Windsor Framework has presented an advantage for his company when competing with businesses in England. "We've been able to win a contract with a large French gym chain, Stade Français rugby team, so it's actually worked out good for us and we are really doubling down on that," he stated, adding that there is still an educational process regarding the ability to ship goods frictionlessly across Europe.
Output in the services sector, which constitutes the largest portion of Northern Ireland's economy, also saw an increase over the past year. However, rising operational costs remain a significant concern for businesses.
Pastry chef Daniel Duckett, who recently reopened his patisserie in partnership with Knott's bakery chain, highlighted that the chain's buying power helps in managing ingredient costs. "They have been able to absorb a lot more of the costs that we would have been paying before," Duckett explained. He also pointed to the impact of rising petrol prices on the cost of goods and transportation, stating, "We have to think, how much do we deliver to the shops? Because that will also affect our petrol prices that fill up vans that travel across Northern Ireland."
Duckett also cautioned about the influence of weather patterns and global climate events on the supply chain for certain products. "I think a lot of people don't realise that the weather and global warming affect a lot of the products we bring in - tropical fruits, vanilla, cocoa, sugar cane," he said. "Those are things that are definitely affected by storms and El Niño. I would try to brace myself for that as well."