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Thursday 26 May 2016

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Warning over Northern Ireland economic recovery

Published 02/06/2010

The Northern Ireland economy will not reach pre-recession levels until the second half of 2012, research said.

Predicted growth should be revised downwards to just 1% this year with weak consumer demand and high levels of government debt signalling a longer path to recovery, Northern Bank said.

Manufacturing will be particularly slow to rebound and levels of construction are expected to further shrink, chief economist Angela McGowan added.

"The downward revision to Northern Ireland's economic growth prospects is disappointing but the second quarter of 2010 has been turbulent from both a UK political perspective and from a European economic standpoint," she said.

"The run-up to the General Election in the UK resulted in open public debates about the state of the UK's public finances and left households and business in a limbo with regard to their future financial positions.

"That sort of uncertainty has a knock-on effect upon consumer spending and overall demand."

She said the report indicated local output will not reach pre-recession levels again until the second half of 2012.

The hospitality industry is expected to grow at 3.7% over 2010 while the health sector should see reasonably good year on year growth of 3.1%, the study said.

Ms McGowan added: "The hospitality sector could rebound this summer as a relatively weak pound should entice households to holiday at home.

"The recent disruption to the airline industry from the Icelandic ash and the unpredictability of this influence in the months ahead could also deter households from flying."

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