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Has recession bottomed out for Northern Ireland?
Tuesday, 12 May 2009
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Hopes that Northern Ireland’s economy downturn had bottomed out received a boost today with a number of upbeat assessments.
Positive views of the local economy, the housing market and retail sales suggested that the long awaited “green shoots” of recovery may soon be visible.
Ulster Bank economist Richard Ramsey said today that he believes the worst of the recession could be behind us and that the property market slowdown is running out of steam.
In the bank’s latest Quarterly Economic Review, the economist said: “Respected indicators such as the UK PMIs suggest that the pace of contraction in the economy is slowing and, in global terms, levels of trade are picking up.”
He added: “It is our belief that the very worst of the downturn is behind us and, whilst the Northern Ireland economy will experience a deep contraction of around four per cent this year, we expect it to return to modest growth in 2010.”
Meanwhile the Organisation for Economic Co-operation and Development (OECD) said its latest data showed the UK was showing “tentative signs” of a pause in the economic slowdown.
The organisation, which comprises most of the world’s industrialised economies, said that while the British economy has not yet reached its lowest point, the pace of decline will slow and recovery may come earlier than in much of the rest of the world.
There were also signs of life returning to the local property market, as local figures from the Royal Institute of Chartered Surveyors showed house sales rose for the third month in a row.
A majority of surveyors said house sales had increased in the past three months and two-thirds of the property professionals in the province said they expect sales to continue to rise for another three months.
The beleaguered high street also got some much needed good news as the British Retail Consortium reported that sunny weather and a late Easter holiday last month had resulted in retail sales growing at their fastest rate in three years.
Spurred on by the spring sunshine, shoppers bought summer clothes, gardening gear and camping equipment, the figures showed.
The research showed that like-for-like comparable sales values across all categories bounced up 4.6% in April, compared to a decline of 1.2% in the previous month.
However, all of the assessments were tempered by the warning that it is too early to say the economy is fully on the road to recovery.
Mr Ramsey warned that Northern Ireland still faces growing pressure on public spending that will require the Executive to accelerate public sector reform as it is forced to make efficiency savings by Whitehall.
The economist also tipped unemployment in the province to rise above 8% by the end of 2009. RICS said while the rise in sales was also accompanied by more buyer enquiries, the housing market is coming from a low ebb and is still some way from healthy.
“The fact is that while transaction levels are increasing, they still have some way to go and prices in some sectors of the market might have further to correct,” cautioned RICS spokesman Tom McClelland.
The BRC said that while the rise in sales — which is the largest leap since April 2006 — is good news for the battered retail sector, the figures were mainly driven by a sunny Easter this April, compared with the same month last year, when cold, wet weather dominated after a March holiday.
And a new survey by Goldblatt McGuigan released today showed that one in four businesses in Northern Ireland are still battling to survive the recession.
Some 36% of local firms surveyed described their main objective for their businesses at the moment as simply to survive.
And a massive 60% of respondents said they had suffered a drop in sales in the first three months of 2009, compared to a year earlier.
The OECD admitted that while the UK economy may stabilise before other nations such as the US, Japan and Germany, the signs of recovery remain weak.
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According to the Bank of Ireland quarter one survey, the trough hasn't been reached at all, and won't for a considerable time yet.
Posted by Willie Wontie | 18.05.09, 08:46 GMT
I would simply ignore economists since your likely to get a wrong prediction than an accurate one. Rather than looking to crystal ball merchants maybe trying to understand what will replace the property bubble economics of the past decade. N.Irelands recent wealth was based on property fueled by cheap credit. That has been our only business model. What is going to replace it given that banks will not be as reckless in the future at lending? Nothing, instead of waiting for miraculous forecasts that are so vague as to be misleading why not focus on developing a dynamic economy and attracting inward investment. Maybe even stop the brain drain which annually robs of N.Ireland of its talent.
Posted by Norn-Iron.com | 14.05.09, 00:32 GMT
place an advert for construction workers in the BT and monitor the number of applications...............then work it out for yourself, no degree in economics required.
Posted by willie survive | 12.05.09, 22:57 GMT
Good to see your all so positive again people. I can't even be bothered to read the article, I now just go straight to the comments. The more depressing the comments are the more up beat the article will have been in general. Without having to read the above, well done on printing some positive news BT. Maybe, just maybe, it will help people feel better, spend a few quid and keep some poor bugger in a job for another week.
Posted by Matt Fox | 12.05.09, 19:34 GMT
Ever wonder why there are no rich economists?
Posted by Davros | 12.05.09, 18:33 GMT
It's a fairly well-known fact that if you put ten economists in a room you'll get twenty opinions.
Just because property prices falls are less steep than they have been doesn't mean that prices will do anything other can continue to fall for some time yet. Even an economist should realise that!
The proverbial 'green shoots' are some way off yet and the chances of the NI economy growing in 2010 are somewhere close to zero, in my view.
I placed an ad for a receptionist less than 24 hours ago. So far we've had nearly forty applicants, more than we received in the whole two weeks when we advertised the same job last year. No sign here of the bottoming out of the recession!
Posted by Steve Laird | 12.05.09, 14:18 GMT
This is a very naive view of the economy and unsurprisingly from a so called Ulster bank economist. Ulster bank have always promoted the local property market and in my opinion are partly reponsible for the illogical market we have had. I have even kept a copy of their "property overview report" from 2007 where all our major estate agents commented on the continued growth and resilience of our property market. I kept the copy because I new that the content was totally illogical. Ulster bank want more investment in constuction and more purchases of local property because they make money from that. Combined with the Telegraph's biased promotion of the local market the result is irresponsible journalism which will only serve to lengthen our recession.
Posted by Seamus | 12.05.09, 13:52 GMT
Utter garbage.
Posted by Plum | 12.05.09, 11:49 GMT
Property prices are still out of range of the reasonable working class so I would think not. Like Ireland; the Republic, Northern Ireland has its own neo-elites, be it the new political and property oligarchs. Hidden behind the former are new mandarins who chair QUANGOs and other emanations of the state. Being relatively few when contrasted with the rest of the population the prices on the street are skewed in their favour.
Relative poverty has now superseded absolute poverty in this province and like all grey areas the people at the lowest rung of the social ladder are the last to be helped.
Posted by Zoon Politikon | 12.05.09, 11:30 GMT
Do this stated figures take into account seasonal variation??
Its funny that banks and estate agents constantly refer to these green shoots, any independant opinions still think that we're nowhere near the bottom.
On a related point, how many of these stories have the BT printed now, I'd say at least 12.
Posted by Martin | 12.05.09, 11:19 GMT