Belfast Telegraph

Friday 25 July 2014

Blow as expected growth is just 0.8%

A new report has slashed growth predictions for Northern Ireland's economy and warned that manufacturing and the public sector will shed a combined 14,000 jobs in the next decade.

Ernst -amp; Young downgraded growth prospects for Northern Ireland's economy to just 0.8% for this year from 1.2% and predicted growth of 1.1% for 2012.

And while the winter all-Ireland Economic Eye report welcomes last week's Programme for Government and accompanying economic and investment strategies, it is cautious about its target '25,000 extra jobs by 2015'.

Instead, the business advisers suggest it will be 2021 before employment can grow to that point.

The Economic Eye's senior economic adviser Neil Gibson said: "The PfG is an ambitious policy document which strikes the right tone of local responsibility for growth whilst recognising the necessity to expand the region's export base.

"The Economic Eye forecast suggests that meeting the targets set out will be very challenging indeed, particularly those relating to job creation. The legislation and policy changes which follow will be the true test of whether the economy can meet the laudable ambition set out across the three strategic documents."

The forecast also said peak employment would not return to the province until 2020.

The diversity of exports from the south would insulate it from severe harm from global factors - but Northern Ireland's punier sectoral spread brought no such benefits, Mr Gibson said.

The report also forecast continued rising employment, with the rate peaking at 8.3% in 2014 and falling only gradually to 7.1% in 2020 - higher than at any time between 2000 and 2009.

It forecasts 9,000 job losses in manufacturing in Northern Ireland in the next decade, and 5,000 fewer public sector jobs by 2020.

But employment creation will come from services, especially business services which is expected to give rise to 18,000 additional roles in the next decade.

However, cutting corporation tax was not completely off the menu, Mr Gibson said. "If it was dead in the water then the UK could have put it to bed a long time ago," he added. "The Government has to write a cheque of £8bn to £10bn a year to support Northern Ireland and it's finding that more and more difficult. So it's in the interests of the UK to find a way for it to cost less."

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