Weak prospects for NI economy
Northern Ireland is predicted to grow its economy by just 0.8% next year and 1.1% the year after, according to the downgraded outlook published in Ernst & Young’s Economic Eye.
It forecasts more job losses in the public sector and in manufacturing in the coming months, as economic activity constricts because of the global and eurozone crises. While the Republic did show signs of recovery earlier this year, E&Y expects that it will return to recession in the latter half of this year. Domestic demand is predicted to decline further in the RoI next year.
While E&Y applauded the Programme for Government, it said it could be 2021 before the NI economy recovers sufficiently to generate a net additional 25,000 jobs — the number of jobs the programme aims to generate by 2015.
Neil Gibson, economic advisor to E&Y, said: “The PFG is an ambitious policy document which strikes the right tone of local responsibility for growth while recognising the necessity to expand the region’s export base. [Our] forecast suggests that meeting the targets will be very challenging, particularly those relating to job creation.”
E&Y expects unemployment here to rise to 7.8% next year and to 8.3% in 2013, as the impact of public-sector cuts is felt. It believes there is little prospect of NI generating additional jobs through exports and suggests that recovery will be gradual, with unemployment still at 7.1% by the end of the decade.
The official unemployment figures may be boosted, adds E&Y, through welfare reform moving people who are currently economically inactive on to the unemployment figures.