Future investment could be jeopardised and underlying problems in the North's economy compounded if political instability and civil unrest continue, industry leaders have warned.
Riots on the streets of Belfast are being played out against a backdrop of the highest rate of UK inflation in two years and the ongoing problems presented to the North's business community by sterling's strength.
Mr Nigel Smyth, director of the Confederation of British Industry in Northern Ireland, said the North's manufacturing base was facing intense pressure.
"There are intense competitive pressures on manufacturers, the current rate of inflation would suggest that further UK interest rate cuts are unlikely and this will not help businesses in Northern Ireland," he warned.
Latest figures from the UK Office for National Statistics show inflation - excluding mortgage repayments - increased by 2.4 per cent during the year to May, up from a rate of just 2 per cent on the previous month.
Economists and business leaders believe the negative images of rioting between loyalist and nationalist factions could undermine the North's economy by deterring potential new investors.
Sir Reg Empey, the North's Minister for Enterprise, Trade and Investment, has acknowledged that the latest unrest will not help the Government promote Northern Ireland as an investment location.
"The people who are causing the trouble in our streets are not interested in anything except pursuing their own aims which have nothing remotely to do with building the economy. "CNN images of riots in the streets of Belfast promote a very negative image and, without doubt, do absolutely nothing to help us sell Northern Ireland as an investment location. The same now applies to many major UK cities such as Oldham, Stoke-on-Trent and Bradford," he added.
Mr Anthony Light, senior economist with the London-based consultancy, Business Strategies, believes the violence witnessed on the streets of Northern Ireland in the last week could play a key role in influencing investor decisions.
"It is difficult to measure the immediate impact on the economy of the recent violence but past trends show that when there is the perception of trouble in an area it impacts on investor confidence," Mr Light said.
He said civil unrest would serve only to compound existing weaknesses in the North's economy.
"We do not know yet what the full impact of the outbreak of foot-and-mouth disease on the Northern Ireland economy will be, nor do we know what the likely effect will be of the slowdown in the electronics industry on the North. The violence is just one of a number of wider issues that have to be considered at this time," Mr Light added.
But Mr Stephen Kingon, managing partner of PricewaterhouseCoopers in the North, believes negative media images of unrest in Northern Ireland deliver an immediate message.
"Investors see a negative image and it alters their investment intentions, once they see the CNN reports on Northern Ireland then it is just another hurdle for Northern Ireland to overcome in trying to win new investment.
"And it is not just potential investors we have to worry about, a lot of companies supply to customers outside Northern Ireland and when these customers see negative images they worry about the supply chain so this unrest has a much wider effect," Mr Kingon added.
