Wait and see message for big investors

AFETR THE BOMB ECONOMY
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The Independent Online
DIANE COYLE

Economics Correspondent

The huge boost to its economy from the 17-month ceasefire means Northern Ireland has a lot at stake if the peace process comes to a halt. But new investors in the province said yesterday that Friday's Docklands blast had not yet led them to change their plans.

Northern Ireland has enjoyed a boom during the past year. Its economy grew significantly faster than mainland UK, with upturns in industries such as tourism and retailing.

The region's output grew 3.5 per cent in 1995, compared to 2.6 per cent growth in the country as a whole. Unemployment fell faster than elsewhere, and it was the only region still creating new jobs in manufacturing at the end of last year.

The number of tourists has been forecast to reach 1.5 million this year, over 70 per cent higher than in 1994. House prices, meanwhile, have risen by more than a fifth since the start of the ceasefire, to an average of pounds 48,541, according to the Halifax Building Society.

Recent surveys suggest that business confidence has reached levels far higher than in other regions, one of the key manifestations being the upsurge in inward investment. The 12 months to March 1995 brought six new projects, and the figure is expected to be around 20 in the year to this March.

Bill Tosh, chairman of the Confederation of British Industry in Northern Ireland, said: ''We had managed to put ourselves on the playing field for inward investment. We're hoping now that, at worst, investors put us on hold.''

Supermarket chain J Sainsbury announced plans to open its first stores in Northern Ireland six weeks after the ceasefire, a move seen as one of the early signs of the peace dividend. The group said yesterday it was not envisaging a change in its plans for seven stores, while carpet retailer Carpetright - looking to expand from three to 10 outlets - took the same line.

A spokesman for Tesco, whose first Belfast store is due to open in October, said: ''Obviously we are concerned and will monitor the situation. But at the moment we see no reason to change our plans.''

Apart from fears for investment, the other main concern is the potential slump in public spending if security measures are restored in full.

Only last week the first project involving the switching of expenditure away from security was announced - a pounds 48m plan to rebuild five primary schools. Overall, the Government has declared a dividend of pounds 286m in spending on economic and social programmes between 1995/96 and 1998/99.

The Northern Ireland Chamber of Commerce and Industry said the opportunities for developing a sustainable and prosperous future for succeeding generations must not be thrown away.

Chamber President Denis Galway said there had been unprecedented interest in trade, tourism and inward investment. ''If there is a return to violence, we will all be thrust back into the economic dark ages and the effects will be felt throughout Northern Ireland,'' he warned.

Fears over prospects for the leisure and the hotel industry - in the province and on the mainland - took Granada shares down 12p to 724p yesterday, and Ladbroke down a penny to 170p.

The Northern Ireland Tourist Board said anything which weakens the peace process was of great concern to the industry, but a spokesman stressed it was too early to speculate on the impact of Friday's outrage.

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