There is no rush of foreign investors looking for glossy new offices in Northern Ireland at the moment.
In fact, according to a new industry survey, the number of potential foreign investors making investment enquiries has dipped sharply in the last quarter.
The Royal Institution of Chartered Surveyors’ latest commercial market survey shows enquiries specifically from foreign investors are continuing to fall. Feedback from local RICS members also reveals evidence that some firms currently located in Northern Ireland are looking to relocate away from the UK in response to the EU referendum vote.
There is no indication where these firms might go or whether they are considering hopping across the Border to the Republic. But the fact that foreign investment sentiment is decidedly flat, at least in the local commercial property market, appears to be somewhat at odds with what the North’s First Minister is telling everyone.
Arlene Foster believes Brexit “represents the biggest economic opportunity” for Northern Ireland in decades. But as a former minister for enterprise, trade and investment from 2008-15, Foster also knows how critically important the EU market is for local businesses.
Export market
Latest statistics from the HM Revenue & Customs show that, in the year up to June 2016, 52 per cent – roughly £2.1 billion – of Northern Ireland’s exports still went to the the EU.
“The Irish Republic continued to dominate Northern Ireland’s export market despite its share decreasing from 36 per cent to 32 per cent compared to the previous year,” Revenue says. “Northern Ireland has a higher proportion of export trade with the EU in comparison with the other UK countries.”
This illustrates, as Foster knows only too well, why trade with the EU is more important to the North’s economy than it may be for other UK regions. Current arrangements with the EU are important not just for indigenous businesses; access to the EU has traditionally been one of the strongest selling points in attracting new foreign direct investment (FDI).
Who could blame any prospective or existing investor for considering the what ifs, once these arrangements are no longer in place?
It is one of those awkward questions the North’s business development agency, Invest NI, would probably love to skim over in any meeting with a prospective investor. At the same time, its rival IDA Ireland is happily promoting its message that “Ireland is a committed member of the European Union and provides companies with guaranteed access to the European market”.
Crybaby
Whether you like it or not – and the North’s First Minister clearly does not – the fact is that all is fair in love and war and in a post-Brexit vote environment.
Foster could be accused of being a crybaby in claiming the Irish Government is sending representatives out to “poach” the North’s investors. Would Invest NI not be keen to promote the North’s much lower operating costs in some instances than those in the Republic and significantly cheaper property options?
As a former minister for enterprise – and a pretty good one at that – she knows foreign firms don’t invest millions on a whim.
Two Belfast business advisory firms claim the North is in the “strongest position of any part of the UK – outside London – to win new FDI following the referendum to leave the EU”.
BDO Northern Ireland and legal firm Carson McDowell have produced a report which they say shows the North is “well positioned to maximise the opportunities Brexit will provide”.
Carson McDowell partner Richard Gray says: “There will almost certainly be changes to the legal landscape in relation to our exit from the EU, but we believe that Northern Ireland will retain its key selling points for investors’ post-Brexit.”
You can never have too many friends, particularly those willing to fight your corner and especially those with whom you share an EU land border. It might not be too late start playing nice.
