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The local political environment has settled, input cost inflation is slowing and borrowing rates are easing. Businesses across Northern Ireland have the potential to benefit from continued economic growth and investment into the region.
Head of Corporate Banking, Northern Ireland
47% of businesses surveyed plan to expand in the next 12 months.
80% of respondents believe developing staff skills to meet future needs is a key growth factor.
25% of those questioned say a lack of access to finance is stopping them from expanding in the next year.
According to our research, carried out in conjunction with News UK*, 27% of businesses questioned in Northern Ireland are confident in being able to successfully grow their business. Respondents in Northern Ireland have a lower level of confidence in the business market (20%) and their ability to access funds to support business growth (20%) when compared to their counterparts across Great Britain.
Businesses questioned in the region say that staff recruitment and retention (47%) is their biggest challenge, followed by an increase in costs (40%), and political instability (27%). Increasing costs is the biggest challenge for 47% of all businesses across the UK.
“With input cost inflation slowing and borrowing rates easing across the region, cost pressures are reducing; this will hopefully flow through to improved profitability over the coming months,” John suggests.
Almost half (47%) of those questioned have plans to expand their business in the next 12 months. However, a lack of access to finance acts as the primary expansion hurdle for business leaders in Northern Ireland.
For those that say that access to finance is a barrier to expanding, it’s always a good idea to reach out to your relationship director at your bank to find out what your options are. John says: “Our goal is to support our clients, understanding their challenges as they work towards achieving their ambitions. We have a range of financial solutions to meet our different clients’ unique needs.”
In terms of developing their business more broadly through technological innovations or diversification, 40% of respondents are either meeting all their goals or making headway. A further 27% are just starting out.
The long-awaited re-establishment of local government should result in increased confidence over the coming months, although strain on the public purse may continue to affect Northern Ireland, given our part reliance on the public sector. Increasing economic activity and productivity is key to long-term economic growth. As such, any policy interventions focusing on capital investment and skills development would be very welcome.
Head of Corporate Banking, Northern Ireland
Developing staff skills to meet future needs (80%) is seen as the second most important factor to business growth, behind embracing digital transformation (86%). Six in ten of those questioned have staff development programmes in place.
Staff are key to the success of a business, so it’s good to see that developing talent is high up on the priority list, and that most have a development programme. Investing in your people is essential to improve productivity. For example, vocational training and higher education programmes can help to equip your workforce with the necessary skills for emerging industries.
Head of Corporate Banking, Northern Ireland
67% of businesses surveyed are embracing digital transformation through automation.
40% of businesses surveyed have started or completed digital transformation programmes.
86% of respondents said embracing digital transformation was important to grow their business.
The majority (86%) of business leaders questioned across Northern Ireland say that embracing digital transformation is the most important factor for business growth. Four in ten have either completed their digital transformation programmes or are busy with them. Only 27% say they’re being held back from doing so, perhaps by a lack of skilled staff.
Northern Ireland businesses say they’re introducing digital transformation in various ways. Most respondents say they’re doing so through automation (67%) or by using data to make better choices (83%), with 60% of businesses saying they have a good understanding of the role data insights can play in responding to consumer needs.
These responses – particularly the use of automation – demonstrate that leaders in Northern Ireland are aware of the opportunities offered through artificial intelligence (AI) and other emerging technologies. However, barriers preventing them from using AI include employee skill gaps (40%) and regulatory issues (40%). A third questioned cite a lack of understanding of the benefits. Given the expected trajectory of AI, businesses that haven’t done so already may want to take the time to explore how they can use these technologies to support their people and their strategies.
Northern Ireland has a growing tech sector, particularly in terms of cyber security and fintech. Investing in research and development and collaborating with universities and other educational bodies is helping to drive further growth in these areas.
Head of Corporate Banking, Northern Ireland
Six in ten of the businesses surveyed across the region say they’ve started their sustainability journey, which is considerably lower than the national (excluding London) average of 75%. Six in ten are either aware of, or are familiar with, Environmental, Social and Governance (ESG) as a business topic. ESG is a framework that helps businesses understand and measure their impact on society, the environment and how transparent and accountable it is. Of these, 11% said they have achieved B Corp status and 44% say they’ve got a well-established approach to ESG.
Among those surveyed in the region, a lack of clear return on investment (27%) and appropriate resources (27%) are the biggest barriers to investing in ESG focused projects.
Waste reduction (67%) is the primary area of sustainability that businesses are most likely to invest in over the next two years, closely followed by renewable energy (60%). More efficient use of resources, and improved recycling could allow business to cut waste disposal costs and potential enhance brand reputation so the focus on waste reduction perhaps comes as no surprise. We’re also encouraged by the percentage of businesses who said they are planning to invest in renewable energy, particularly given that the national average for this is only 54%.
Conversations with clients have revealed that the recent spike in energy prices has driven them to explore alternative solutions. This has resulted in increased investment in renewable energy. With the global shift towards sustainability, we’re seeing Northern Ireland businesses leverage opportunities in renewable energy and expect to see more of this.
Head of Corporate Banking, Northern Ireland
To discuss your business requirements and how Barclays can support you, contact us today.
*Source: YouGov ‘News UK Barclays Survey’ April 2024. An online quantitative survey of 1000 business leaders working in businesses with at least 250 employees. Working in all regions of the UK except London. NB Survey size in Northern Ireland 15 businesses.
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