'Mountain to climb' before Northern Ireland economy returns to normal
Northern Ireland still has a "mountain to climb" to get back to the economic performance it enjoyed before the banking crisis, an economist has said.
The Northern Ireland composite economic index yesterday showed output remains 8% below its 2007 peak and is around half the output of the UK as a whole.
Over the year, the economy grew 1.3% from quarter two of 2014 to quarter two of 2015 - half the overall UK growth of 2.7%.
However, in a reversal of fortune for the part of the economy most blighted by the downturn, construction made the largest contribution to growth in the year to June 2015.
But despite the year-on-year growth, output fell 0.1% over the first and second quarter. Both the production sector and public sector contracted, though there was expansion in construction and services. And while the index is up 3.5% on the nadir of the last three months of 2012, it is still 8.2% below the maximum reached in 2007.
PwC chief economist Esmond Birnie said the results made for "uncomfortable reading" but that we should not conclude that the province was back in recession.
"Nevertheless, this could be another indicator that the Northern Ireland economy is slowing down."
And the contrast between our 1.3% year on year growth and the UK's 2.7% spurt was a reminder we should "mind the gap" between the two economies.
While our index was still 8% below its peak, UK GDP had surpassed its 2007 peak by 6%.
"In other words, we still have a mountain to climb in terms of even recovering to where we were eight years ago."
Economist Andrew Webb of Webb Advisory said the index raised "red flags" of concern, with the quarterly output fall between quarter one and quarter two raising fears over whether the recovery would stick.
He added: "In the months ahead, the squeeze on the public sector is likely to become more pronounced and I'm not convinced that the private sector is strong enough currently to offset this. The other red flag that concerns me is that economic growth is well off the pace compared to the rest of the UK (and significantly behind our neighbours in the south). This is all the more concerning when I consider we are heading towards more uncertain global conditions that are likely to reduce economic prospects further."