Belfast Telegraph

Productivity putting brake on Northern Ireland's economic recovery

By Margaret Canning

Economic recovery is slowing down in Northern Ireland, with poor productivity our biggest challenge, business advisers PwC said today.

There was also the risk of a two-speed recovery, with certain sectors creating jobs while others lost them.

PwC forecasts growth of 1.8% for Northern Ireland in 2015 - down from 2.2% last year.

PwC said that Northern Ireland had experienced the highest unemployment of 12 UK regions over the last two years - even though unemployment numbers had fallen.

In addition, more than 60% of the unemployed had been on the dole for more than 12 months - and our youth unemployment rate of one in five was much worse than the UK rate of 13.5%.

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PwC's Northern Ireland economic outlooked warned that increasing productivity was the key driver of long-term growth.

And if companies could not produce more, the introduction of the national living wage next year would simply squeeze profits and result in more joblessness.

PwC chief economist Dr Esmond Birnie said: "Over the past seven months business confidence has been mixed, sometimes negative but always lagging the Great Britain regions.

"There have also been recent mixed messages around consumer confidence, with June 2015 seeing the first rise in unemployment for more than two years. This may simply be a blip - or it may be indicative of a deeper malaise."

Output was still 8% below its 2008 peak. "It is something of a two-speed economy, with employment contracting in public sector and financial services but growing fairly rapidly in advanced manufacturing, pharma, food processing and tourism," Dr Birnie said.

 

Belfast Telegraph

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