BELFAST BRIEFING:Honed by years of surviving the Troubles, ruthless resilience rules in Northern Ireland, writes Francess McDonnell

BUSINESSES IN the North know a thing or two about surviving in difficult times.

For more than three decades local businesses had to operate in an often hostile environment while the economy was held to ransom by conflicting political ideologies.

It did not matter whether they were a small family firm or an internationally owned company. If they wanted to survive they had no choice but operate a business-as-usual policy, regardless of what was going on outside their gates.

That approach to doing business created a ruthless resilience that might help explain why companies in Northern Ireland are less pessimistic about the future than some of their counterparts.

Research published this week shows business confidence has plummeted across the UK.

According to a survey carried out by the Confederation of British Industry (CBI) and Experian, the outlook for many businesses is bleak.

Companies in the UK told the CBI that the combination of rising costs and falling profit margins was contributing strongly to the current slowdown. Many manufacturers across the UK say they expect orders to fall, inflationary pressures to intensify and jobs to be lost in the short term.

However, according to the CBI, when it comes to Northern Ireland there is a surprising note of optimism in the air.

The CBI says Northern Ireland is currently the "least-pessimistic region" in the UK.

Business confidence among its members in the North has fallen - but only slightly compared to the steep declines reported in other areas. It also points to the fact that when it comes to the order books, companies in Northern Ireland are in a much better position than most in the UK.

The results of the CBI survey in the North found that not only had there been a steep rise in exports over the last three months, but there were "exceptionally healthy export order prospects".

Manufacturing firms in the North said that output had been strong and was forecast to increase in the coming quarter.

But although firms have painted a surprisingly positive picture of the North's manufacturing sector, it may not be quite as healthy as the research might first suggest.

Companies in the North are under the same extreme pressures as every other manufacturing firm in the UK is at the moment, and they are very vulnerable to any further economic slowdown.

Manufacturing companies in Northern Ireland may be in a better position than most - but they are also warning that there are likely to be significant job losses in the months ahead.

Producers and manufacturers in the North have traditionally struggled to compete on costs, and the experience of one of the North's last shirt factories underlines why.

The Coleraine-based shirt maker RH Houston will close this week after almost 50 years in business. The firm said low-cost competition from overseas meant it was no longer viable for the company to operate.

RH Houston had tradition and experience going for it but, like the majority of companies, in order to survive it had to be able to sell its product outside Northern Ireland.

The firm could no longer to do that, but there are other newcomers, such as one fledgling Lisburn company, who realise that cracking the export market is the key to their future growth.

The Camco Group, which supplies woodworking machinery and furniture components for home and office furnishing, intends to invest £700,000 (€882,000) to increase exports.

It is a major investment for a firm of its size, but it is just one of a growing number of examples of how companies in the North are looking outside of Northern Ireland to grow their business.

According to the CBI the manufacturing sector across the UK has been helped by the weakness of sterling against the euro - and the North has benefited particularly.

The Northern Ireland Exporters' Association (NIEA) says companies have taken advantage of new opportunities that currency fluctuations have created in the South.

Its research shows that in the first six months of this year the value of exports from the North to the Republic increased to €664 million.

NIEA director Robert Hamilton says the strength of the euro has helped companies who export to the South be more price-competitive.

The growth in exports to the South may be one of the factors behind Northern Ireland's emergence as one of the "healthiest regions" in the latest CBI business confidence survey.

But the fact remains that, regardless of how healthy the CBI perceives the North to be at this time, many companies are experiencing tough conditions in the current economic climate.

This week the Bank of England's monetary policy committee will decide whether UK interest rates, currently at five per cent, should be altered.

Alan Bridle, head of economics and research at Bank of Ireland Northern Ireland, believes the rate will be left unchanged.

However, other economists have warned there may be a shock rise on the cards. Any rise is likely to exacerbate the already tight conditions many Northern Ireland companies currently find themselves in. Even the most resilient of businesses sometimes need a break.

"The growth in exports to the South may be one of the factors behind Northern Ireland's emergence as one of the 'healthiest regions' in the latest CBI business confidence survey