Increased investment in social house building would be a major contribution to getting the local economy back on track, according to a report released today by the University of Ulster.

In the report — titled Addressing the Economic Downturn: the case for Increased Investment in Social Housing — economists Mike Smyth and Mark Bailey said public investment must focus on areas that can provide the greatest social and economic benefits during the recession.

“Social housing has strong multiplier effects in terms of employment and has greater short-term impact on the Northern Ireland labour market than other construction investments. This is due to a higher labour-intensity in house building activity,” said Mr Smyth, who is the university’s head of economics.

“Social housing has strong non-monetary impacts on the economy and contributes more than some other types of capital investment programmes to the achievement of sustainable development.”

The economists concluded that the potential boost to deprived areas and creation of construction jobs justified the increased investment, noting that other areas of the UK have already moved to target this area.

They said house building creates more jobs than other forms of capital investment — stating that for every ten jobs created by building social housing, seven jobs will be created or sustained elsewhere in the Northern Ireland economy.

Responding to the report, Social Development Minister Margaret Ritchie said: “If [Mike Smyth] is arguing that investment in social housing is one of the best ways of countering the economic downturn, then we in government need to listen. If he is saying that investment in social housing can stimulate jobs like no other capital investment can do, then we need to act.

“If we do not revise our spending priorities while this downturn persists, housing need will keep growing and the construction industry will continue to shrink.”

“The world has changed in the time since the Executive agreed a budget. Other governments have responded to these changes by channelling additional resources into house building. The University of Ulster paper supports the case I have been making at the Executive table. I hope Executive and Assembly colleagues will read this paper and support its recommendations.” For more on social housing, read |John Simpson’s column in tomorrow’s Business Telegraph