NORTHERN IRELAND is suffering from a “finance gap” that is stunting investment and growth and preventing job creation, according to a new study by one of the North’s largest business bodies.
The Confederation of British Industry (CBI) in Northern Ireland said the availability of credit is a major obstacle not only for local businesses but also for the North’s Executive, which wants to create an additional 25,000 jobs.
The CBI warning comes as latest official government statistics show the number of people claiming jobless benefits in the North rose last month to 62,600.
This follows a general pattern across the UK where the total number of people claiming allowances increased by 8,100 last month, to 1.6 million.
The latest figures show that the unemployment rate in Northern Ireland rose to 7.1 per cent in the three months to April but remained lower than the overall UK rate of 8.2 per cent.
The labour market statistics also highlight that the total number of people out of work in the UK fell by 51,000 to 2.61 million in the last quarter but this trend was not replicated in Northern Ireland. The jobless total rose for February to April in the North by 5,000 people, to 60,000.
According to the CBI, if this trend is to be reversed, then Northern Ireland needs to deal with the availability of finance in the local economy.
Ian Coulter, the CBI’s Northern Ireland chairman, said: “The provision of appropriate volumes and types of finance is essential to supporting economic recovery. We must create a stronger funding ecosystem for the future.
“While there is an ongoing debate about the causes of financial gap, the reality is that funding conditions have changed dramatically and our banks, our businesses and our Executive need to work together.”
The CBI report, Getting Growth Finance Going, found that the bar had been raised on bank lending in the North, the flow of venture capital was patchy and the overall funding landscape locally was “not suitably geared for success”.
It also said local firms need to do more to get “funding ready”.
