Forecast indicators point to less positive outlook for 2015
Growth in the Northern Ireland economy will reach 2.4% this year but the picture for 2015 is less rosy, according to a major forecast from EY today.
The latest 'economic eye' forecast from the business advisers said the strengthening UK economy would power gross value added (GVA) increases in Northern Ireland.
That 2.4% would be 1% higher than the growth experienced in 2013, EY said – and to sustain growth, Northern Ireland needed to reduce its dependence on the economies of the Republic and Great Britain.
Consumer and government spending were powering this year's progress – but those factors themselves carried risks to the sustainability of the recovery in Northern Ireland, which EY said will lag behind a 3.1% rebound in the Republic.
Michael Hall, managing partner for EY in Northern Ireland, said: "Economic indicators for 2014 continue to build on the positive momentum of last year. However, the outlook is slightly less positive for 2015.
"Overall business sentiment is on the rise, with recent measures announced in the Chancellor's Budget, such as enhanced tax relief, undoubtedly having a positive impact on Northern Ireland businesses."
And Graeme Harrison, economic advisor to the economic eye, said: "A number of economic indicators support the idea of a Northern Ireland economic recovery.
"However, this needs to be set in context of how much the Northern Ireland economy has contracted in recent years.
"The 12% to 13% decline [since 2008] estimated by the Office for National Statistics (ONS) shows a steeper fall than was experienced by the Republic for GDP or GNP.
"The challenge for the Northern Ireland economy is to sustain this year's growth into 2015."
Mr Hall also said Northern Ireland could face more public spending cuts next year.
"Given there is an election next May, there is a fear that there may be further austerity measures in the UK.
"We need to be mindful of the adverse impact this could have on the economy and it crucial that Northern Ireland's new Programme for Government pays proactive heed to the economic risks and realities identified by economic eye."