Northern Ireland's economy is at a crossroads following the comprehensive spending review with the construction sector staring further into the abyss, business leaders said.
Finance Minister Sammy Wilson said the cuts in the capital and current spending leave Northern Ireland facing a drop of £4bn in public spending over four years.
Francis Martin, head of Northern Ireland Chamber of Commerce, said the cuts could trigger the loss of up to 30,000 jobs, marking a "watershed" for the Northern Ireland economy. He called for measures to rebalance the economy, including 'opportunity zones' in areas with below average private sector employment. "By expanding the private sector we can offset job losses in the public sector," he said.
PriceWaterhouseCoopers chief economist Esmond Birnie agreed with the need to accelerate private sector growth. "If we can combine new tax offerings with innovative public sector reform, we can fund capital projects, generate new income and improve service delivery while still reducing size and cost of the public sector."
Ulster Bank chief economist Richard Ramsey said the proposed 40% cut in capital investment was "the sting in the tail".
"This provides our local construction sector with a very bleak future and pretty much copper-fastens a further surge in job losses, running into several thousands, in the coming years.
"This comes on the same day that it was revealed that construction output has fallen more than 25% from its 2006 peak."
John Armstrong, head of the Construction Employers' Federation, warned the cuts would have "grave social and economic consequences". "Some 21,000 construction workers have lost their livelihood in the last 30 months. The harsh reality is that thousands more will now join them. There will also be thousands of indirect job losses from the business sectors that rely on construction."
Michael Murray of the Institute of Directors in Northern Ireland said infrastructure plans should be protected but added: "We welcome the Chancellor's intention to fundamentally reform the public sector."