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Northern Ireland economy still stuck in the UK slow lane with just 0.7% growth in year's first quarter

By John Mulgrew

Published 22/07/2016

Global aim: Simon Hamilton
Global aim: Simon Hamilton

Northern Ireland is continuing to experience slow growth with the latest data casting a "sober perspective" over the economy here.

The economy grew by 0.7% during the first quarter of the year, based on the same period a year earlier.

The increase was led by a 1.2% boost in the services sector and a small increase of 0.2% in construction.

But they were offset by a reduction in public sector headcount, and production, which includes the manufacturing sector, according to the latest Northern Ireland Composite Index.

The public sector suffered a fall of 2.2% over the same period.

And while PwC's chief economist Esmond Birnie said it was "good news" that the economy was growing, it is still lagging behind the rest of the UK.

The UK's GDP grew by 2% over the year to quarter one.

"We are still 7.3% below the pre-2008 banking crisis peak level of output in the Northern Ireland economy," he said.

"So, in that sense, while the economic recovery and employment growth over the last few years has been welcome, it has also been incomplete.

"The figures also confirm that the Northern Ireland economy has been slowing down for some time.

"The data indicated growth of 0.7% in the year to Q1 2016, but in the year to Q1 2015 the pace of growth was nearly three times greater, at 1.9%."

Meanwhile, economic output increased by 0.4% in the first quarter of 2016.

Danske Bank's chief economist Angela McGowan said the findings are "consistent" with its own view on economic activity at the beginning of the year.

She said the figures "demonstrate that the local economy was showing signs of relatively strong private sector growth in the early part of this year".

"However, we have to be realistic about the economic consequences of Brexit, particularly for investment and overall confidence levels," she added.

"Annual forecasts have therefore been revised down accordingly to around 1% for this year and 0.2% in 2017.

"We must also bear in mind that any new slowdown in the economy will be met with both monetary and fiscal responses from policy makers and this should help to mitigate some of the economic stresses arising from Brexit-related uncertainty."

Economy Minister Simon Hamilton said that while the statistics "show a moderate overall increase in the Northern Ireland economy, it is nonetheless welcome that it is the private sector that is once again leading the way in growing our economy".

"Our recovery is characterised by strong employment growth. This was demonstrated by the recent labour market statistics showing the number claiming unemployment related benefits has fallen by over 7,000 people in the year to June 2016," he said.

"My number one aim as minister is to transform Northern Ireland into a globally competitive economy. I want our economy to continue on the present path of constant improvement, growing in size and rebalancing from the public to the private sector."

Belfast Telegraph

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