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Northern Ireland growth rate will be worst in the UK, according to expert

By Margaret Canning

Published 22/01/2016

Esmond Birnie, PwC chief economist
Esmond Birnie, PwC chief economist

Northern Ireland's economic performance will be the worst of all UK regions during 2016, according to PwC's latest forecast.

The business advisory firm predicted that the economy would expand by 1.4% during the year - well below 2.2% expansion forecast for the UK as a whole.

The downbeat assessment came after the Northern Ireland Composite Economic Index indicated there had been 1.1% growth in the year to the third quarter of 2015 - around half the rate of expansion in the UK as a whole.

The index also revealed a 0.8% decline in economic activity between the second and third quarter of last year - the first quarterly fall in activity in the past four quarters.

But PwC estimated that the Republic's economy would grow by 5.5% this year.

Chief economist Esmond Birnie said falling unemployment in Northern Ireland - the claimant count has dipped by around 20,300 to 38,700 in the past two years - masked a lack of growth in other indicators.

"Total employment in Northern Ireland had broadly returned to pre-crisis level by the third quarter of 2015," he added. "But according to the Northern Ireland Composite Economic Index, the employment gains were not reflected in output, which remains 8% below the pre-crisis peak."

He also cautioned that while the data suggested there had been an increase in employees working more than 16 hours - the definition of full-time - there was a weaker increase in those in the traditional full-time hours of 30 to 38 hours per week.

"That would partly account for the mismatch between employment and output and also suggests that the Northern Ireland labour market is less robust than the headline data suggests," he said, warning there was still a "mountain to climb" before the economy recovered.

Belfast Telegraph

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