BREXIT could scupper the growth of the north's flourishing SMEs, a new report has warned.
The UK Local Growth Dashboard 2018, published by the Enterprise Research Centre (ERC) - an annual health-check of SMEs (small and medium-sized enterprises) has revealed that Northern Ireland companies are outperforming their counterparts in the rest of UK.
In the north 2.7 per cent of small firms record turnover of more than £1 million in their first three years, well above the UK average of 1.9 per cent, while in the outer Belfast area and the east of Northern Ireland the figure rises to 3.3 per cent. The relative success recorded is despite the north having the lowest start-up rate in the UK of 27 per 10,000 population, almost half the average of 50 per 10,000.
When it comes to productivity growth over the 2014-17 period – where faster turnover growth than employment indicates an increase – Northern Ireland again leads the way , with 11 per cent of companies becoming more productive against a UK average of 8.4 per cent. Belfast is the most productive area for SME growth in the UK (11.8 per cent), with the east of Northern Ireland (11.1 per cent) along with the west and south (11 per cent), rounding off the top
In spite of the relative positivity amongst SMEs in the north the director of the ERC, Professor Mark Hart has expressed concern progress could falter if customs arrangements change post-Brexit.
"Firms in Northern Ireland have achieved impressive growth and productivity gains over recent years. This may be down to the stability of the business support environment fostered by its business development agency, Invest NI. It may also be something to do with Northern Ireland’s lower productivity in the past – so it may be catching up," he said.
“But a real concern is whether this can be maintained if Brexit results in more complex customs arrangements - which on the current path is almost certain - either between Northern Ireland and the Republic, or indeed between Northern Ireland and the rest of the UK and beyond. With the private sector in Northern Ireland traditionally rather fragile, this recently developing good news story could turn very sour indeed."
The ERC is the UK’s leading source of independent research on the growth of SMEs.
