A bus trip back to the future is not an option for us
Published 29/05/2016 | 02:30
Nothing spooks the markets quite like uncertainty. Even if things are forecast to go badly you can at least plan for that. Best of all, of course, is when an upward trend is predicted. But not knowing quite what is going to happen can be nightmarish.
The recovery in the Irish economy over the past three years has been in part the result of sustained growth in our nearest neighbour and most important trading partner - the United Kingdom.
The economic ties that bind these two islands together are hugely important to both countries and anything with the potential to loosen or disturb them in any way could pose a serious risk to businesses on both sides of the Irish Sea as well as north and south of the border.
Total trade between Ireland and the UK was worth more than €45bn in 2015 and is forecast to reach €60bn by 2020. However, that healthy prognosis is based on the UK remaining in the EU. The picture would be starkly different if the people of the United Kingdom vote to leave on June 23 next.
Indeed, the predictions for the impact on the UK economy of a leave vote are pretty dire. The WTO has estimated that it would leave UK consumers some €9bn worse off; sterling is predicted to fall in value by some 25pc; inflation is predicted to rise to more than 7pc as a result of higher import costs and other factors; and interest rates are expected to rise in turn.
None of this is good news for the people of the United Kingdom but it would also be very bad for us here in Ireland. Our exports to the UK could suddenly become much more expensive, the capacity of UK businesses and consumers to buy Irish goods is likely to be diminished, and Ireland could become a much less attractive destination for both leisure and business travel.
At the same time, Irish businesses will suffer on the home market with an influx of British imports, made that bit more competitive as a result of a fall in the value of sterling.
Brexit could, however, result in financial companies and FDI clients choosing to rethink where they locate or move their operations. Ireland, as the UK's nearest neighbour with significant labour talent, could prove a likely benefactor.
The mere prospect of Britain leaving the EU, however slight at this juncture, has undoubtedly had a dampening effect on hiring intentions and patterns here in Ireland. While no company will come out publicly to announce that it could be in trouble in the event of a leave vote, our experience is that they are quietly making preparations for just that eventuality.
The best leaders hope for the best but also prepare for the worst. Our contacts with clients indicate that this is precisely what is happening when it comes to recruitment. Decisions on new hires across a variety of sectors, from financial services to manufacturing and FMCG, are showing signs of a slow-down and hiring plans and forecasts have stalled over the last six weeks.
This is merely prudent management. The possibility of a Brexit, aligned with other global uncertainties, has created a sense of inertia for Irish businesses with interests traversing the UK and Europe. Arguably, along with political uncertainty and variable levels of consumer confidence in Ireland, all of these factors if sustained could impact Irish economic growth in the second half of 2016.
Conversely, Ireland could be in for a significant jobs boost in the event of a 'remain' vote, with a renewed sense of confidence arising. In such an event, we expect to see recruitment ramped up quite significantly in the wake of a positive decision by the British electorate, but this will present challenges for both employers and the recruitment sector.
The release of pent-up demand always has the effect of creating shortages.
As an Irish-owned multinational, we hope that the United Kingdom will vote to stay in the European Union.
Karen O'Flaherty is chief operations officer at Morgan McKinley
The things in life that I am truly passionate about are my family, the credit union movement, my business, and a peaceful and prosperous Northern Ireland.
Until a few months ago I hadn’t realised that membership of the EU was also something that stirred a passion in me. But when I look at my family, my business, my work colleagues and the well-being of my fellow citizens, the EU is playing its part in all of their futures.
As a life-long credit union member I understand the concept of pooling resources and common bond and that helping each other is a two-way street — and the EU is like that too. Many people fail to see the benefits of EU membership but those of us from Northern Ireland and the border regions are only too aware of its seismic influence across a range of common interests from healthcare to community development and infrastructure.
The idea of the EU sprang from the despair of countries devastated by Nazism. The EU was born from hope and other countries have since learned from that experience. Ultimately the EU ideal of coexistence and mutual dependency without loss of identity took root in our own journey towards peace. Ours is a European model. It builds on our shared interests and common aspirations, and with no loss of identity or allegiance.
As someone living in a border region all my life and with a business that spans the island, I am all too acutely aware that a Brexit most definitely means borders, barriers or tariffs. It also means instability — instability that neither North nor South can afford after a long period of political and economic turbulence.
I am horrified at the recklessness of some Leave campaigners as well as some ill-informed commentators in the Republic who fail to understand that the future security and prosperity of our people in Northern Ireland and the Republic is one based on cooperation, increased trade and business synergies. Physical borders lead to mental borders — and that only serves to divide and disrupt.
Northern Ireland is the UK region benefiting most from EU membership. In the last five years, 86 EU investment projects in Northern Ireland have created more than 2,000 meaningful jobs throughout the North.
Foreign direct investors have indicated that EU membership has been an important factor in choosing Northern Ireland as an investment destination. Some 25 new investors were attracted to Northern Ireland in the last year, many citing access to the single market as a key factor in their decision. Our friends in the USA, Japan, India and Australia have called on Britain to remain in the EU. Even China echoed those sentiments. Unsurprisingly, Ireland has been to the forefront of our good neighbours urging a Remain vote. We welcome that because so much has been done to build up relationships, not least of which through cross-border bodies such as InterTradeIreland and, of course, the joint-marketing of Northern Ireland and the Republic through Tourism Ireland.
At the heart our Remain campaign are the interests of small businesses and local jobs — after all, small businesses account for 98pc of our economy. NI food and drink producers alone export a whopping 83pc of their products within the EU.
Even Leave experts suggest that within five to ten years after an EU exit, the manufacturing base in the UK could be wiped out. That’s 50,000 people in jobs right now. What are the chances of a 40-year-old man or woman today in one of those jobs getting retrained at 50? The answer is slim to none.
Meanwhile, the single farm payment from the EU accounts for 87pc of farmers’ income.
These are facts and its why the vast majority of voices from our trade unions, businesses, manufacturers, food producers, farmers, universities, the third sector and from across the political divide recognise the danger posed by some of the reactionary and divisive zealots who back the Leave campaign.
A bus trip back to the future is not an option for us.
Tom Kelly OBE is head of the Northern Ireland ‘Stronger in Europe’ campaign
Sunday Indo Business