Strong annual performance but challenging times ahead
Invest Northern Ireland’s provisional figures for the year ended 31 March 2009, show that, for the first time, clients made investment commitments of over £1bn in a single year, commitments which will ultimately see the local economy benefit from £165m annually in wages and salaries.
Commenting on the results, Invest NI Chairman, Stephen Kingon, said: “These results were achieved despite extremely challenging economic conditions, particularly in the second half of the year, when the world economy entered unchartered waters.
“Whilst the results are strong, it must be clearly understood that in the current global economic climate, businesses everywhere are constantly re-evaluating their positions, with many adopting a more cautious outlook, seeking to cut costs and delaying ambitions for expansion.
“We are already seeing this translate into a decline in early stage work-in-progress, which will inevitably impact on the out-turns over the next two years.
“Given that we can do nothing to impact on global macro-economic issues, we must maintain a sharp focus on those areas we can control, and which will make the biggest difference to our clients and, where possible the wider business community.
“Whilst Invest NI’s initial response to the deteriorating economic conditions has assisted many businesses to identify the issues they are facing, nevertheless we need to build on this momentum and provide tailored support to enable them to survive in the current downturn and to be prepared for the future upturn.
“Throughout 2008-2009 many clients have improved their international competiveness and increased levels of export, with Invest NI assistance. We need to continue to ensure that we support clients in adjusting their business model to meet the demands of the current economic climate, in developing innovative products and services to remain internationally competitive and in winning new business particularly in overseas markets. While the short-term prospects will remain challenging nevertheless it is vital that we stabilise the existing client base and put the building blocks and investments in place in order to build confidence and to take the advantage of the eventual recovery.” he concluded.
Across all divisions:
Almost 2,600 offers made to clients which will result in total investment of £1,178m;
6,494 new jobs promoted and a further 951 existing jobs safeguarded;
1,253 locally owned businesses supported to invest over £350m in projects which will generate £70m annually in wages and salaries;
100% increase in number of clients seeking export support and 18% more companies visiting external markets;
New Grant for R&D, launch of Innovation Vouchers and series of Innovation Masterclasses have encouraged more clients to embrace innovation;
Representatives of over 1,000 businesses offered practical advice and assistance in areas such as financial and cash flow management, business direction, securing extra sales, improving internal efficiencies and supply chain issues to help them navigate through the current challenging times;
US:NI Investment Conference positioned Northern Ireland as a competitive, stable and welcoming region that is pro-business and pro-active in meeting the needs of international investors;
43 investments by externally owned clients with investment commitments of £780m investment, promoting or safeguarding 4,212 jobs and generating £95m annually in wages and salaries.
Alastair Hamilton, Chief Executive of Invest NI, said: “The outcomes in 2008/09 were heavily influenced by the changing focus of many of our clients in the face of weakening economic conditions, particularly in the second half of the year.
“The majority of our activity was focused on locally-owned Small and Medium Sized enterprises, supporting them to address issues and remove constraints to growth or competitiveness.
“With the priority of many clients having been to protect their current position in the short term, over 1,000 businesses attended a series of events and seminars we organised to offer easy to access, flexible support to our clients and, where possible, the wider business community.
“Despite the current pressures, it is encouraging that many local businesses are continuing to look to the longer term, as shown by the high level of participants in market visits and export programmes, and the positive response to our programmes to encourage innovation.
“As well as supporting existing companies, we have continued to provide the environment in which new businesses can flourish. Guidance and support was provided to 2,474 new local business starts and a new suite of Entrepreneurship Development Programmes introduced, enabling both potential entrepreneurs and young businesses with high growth potential to acquire the necessary skills to start, and grow.
“The extremely high level of investment commitments in the past year, was dominated by four large projects by externally owned clients, which account for over 55% of total planned investment. These include Bombardier’s C-Series project, the largest ever single company investment in Northern Ireland.
“However, with many businesses facing declining orderbooks and focusing on short term measures to control costs, 79 of our clients announced a total of 3,499 redundancies, the majority in the second half of the year.
“Many of these stemmed from larger manufacturing clients, including a number of inward investors with a North American base. The global decisions being taken by their corporate headquarters have inevitably had knock-on effects in Northern Ireland, and it is important that we continue to engage with these key clients, at both a local and international level, to ensure that our strong business proposition continues to be heard.
“A number of these corporations supported the US:NI Investment Conference in May which attracted the largest and most influential business delegation from corporate America ever to visit Northern Ireland.
“Since then, a comprehensive follow-up programme has been undertaken with all delegates, but, given that lead times for inward investment, from initial contact to signed agreements, are usually 18-24 months and in some instances can be longer, it will be some time before we realise all the benefits from the Conference, particularly given the deteriorating global economic conditions in the past 6 months
Alastair Hamilton continued: “It is clear that the previous year has seen fundamental shifts in the business landscape, locally and globally, and this current year is likely to present equally challenging conditions for all involved in economic development.
“Invest NI is committed to work in closer partnership with our clients and stakeholders to build further improvements into our service delivery and deliver the most effective and efficient support to help them through these challenging conditions. Whilst the results for 2008/09 reflect good and solid progress, in the challenging times ahead, it is clear that much more remains to be done,” he concluded.