Belfast Telegraph

Economic activity is up 4% but recovery still slow

Economic activity generated by businesses in Northern Ireland increased by nearly 4% to £18.7bn last year, according to a survey.

But one expert has claimed that taking inflation into account, the real figure could be as low as 1.7%.

Ulster Bank chief economist Richard Ramsey said combining the latest figures to include public sector output shows that Northern Ireland's recession was much deeper than previously estimated.

Mr Ramsey said there had not been a "meaningful recovery" for the province in the past few years.

The new annual business inquiry from the Northern Ireland Statistics and Research Agency (Nisra) collects information from businesses and covers about two thirds of the economy - but excludes the public sector.

It found that Gross Value Added (GVA) - the measure of businesses' income minus costs for external goods and services - was £18.7bn, up 3.8% (£675m) on 2009. That compared to a UK-wide increase of 2.9%.

According to Nisra, GVA was up in the production, construction, distribution and services sectors

Despite the property downturn, turnover in construction was said to have increased by 2.9%. Production enjoyed a 5% increase in turnover while its GVA was up 2.6%. Manufacturing turnover was also boosted by 4.9% and GVA by 5.4%.

The Department of Enterprise, Trade and Investment claimed the study shows that the Northern Ireland economy performed more strongly last year than the UK as a whole.

But Mr Ramsey said the overall rise in GVA could be as little as 1.7% when inflation is taken into account.

"Consumer price inflation, which is narrower than economy wide inflation, was pretty high in 2010. For example, retail price inflation averaged 4.6% in 2010 and consumer price inflation averaged 3.3% in the same year."

He said his analysis of GVA figures from last week showed that the Northern Ireland economy contracted by 3.1% in 2008 and a hefty 6% in 2009 - compared to earlier official estimates of 1.3% and 3.6% respectively.

That left Northern Ireland with an accumulative contraction for those years of around 9% - the steepest decline of all UK regions.

Mr Ramsey added: "During this recession, the Northern Ireland economy has more closely followed the Republic of Ireland's economic growth trajectory as opposed to the general UK economic growth profile."

1.7%

The potential figure for GVA when inflation is taken into account

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