BUSINESS confidence in the Northern Ireland economy continues to grow, according to a report published by the Confederation of British Industry. But it showed that nearly as many companies confidence in their own business had fallen as had increased, leading to the lowest positive balance 1 per cent for four years.

Manufacturers' own business confidence is higher than that of the service sector, which is a reversal of recent trends, said the CBI. This was reflected in growing export demand up 24 per cent despite a drop of II per cent in exports to Britain.

Ms Deirdre Stewart, acting director of the CBI in Northern Ireland, said "The fact that companies own business confidence is not running at the high levels which we have seen over the last couple of years shows that the recovery is still quite patchy."

She said exporters continued to do well but added "Those relying on the British market, particularly industries dependent on a buoyant housing or construction sector, are still suffering."

She said it was encouraging that employment, particularly in the manufacturing sector, continued to rise and that capital investment plans were holding up well.

The main concerns of companies, said the report, were high raw material costs, late payment and energy costs. Profit margins remained tight, but generally static. There was intense competition, which meant that price rises could not be passed on to customers.

Despite Northern Ireland's high, but falling, unemployment rate, the CBI reported a shortage in skilled, workers, especially among fillers, development engineers, junior management and specialists in the electronics field.