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Brexit would bring 'economic shock' for Northern Ireland, warns economist

By Margaret Canning

A Brexit would provide a "huge economic shock" to Northern Ireland and even reverse the trend of rising employment, it has been claimed.

Danske Bank chief economist Angela McGowan issued a stark warning against a vote to leave the EU as data showed the number of people in work in Northern Ireland is at a record high. The labour market survey for the first quarter of 2016 showed there were 837,000 people in work in Northern Ireland between January and March - an increase of 10,000 year on year.

But it does not reflect job losses this week - with 70 jobs going in Aer Lingus, and tobacco firm Gallaher's letting staff go as it winds down in Ballymena.

The unemployment rate for January to March was 6.2% - down slightly on the same period in 2015, but still higher than the UK rate of 5.2%.

The separate claimant count for April - which measures the number of people claiming unemployment benefits - was down 600 to 37,900, the first monthly fall in three months.

Economic inactivity had also fallen, and at 26.3%, was at its lowest in 21 years since the series began. However, Northern Ireland is still lumbered with the highest rate of economic inactivity of any UK region, where the average is 21.6%.

Ms McGowan said the data presented a "reasonably good" picture, but that it may have deteriorated if investment decisions were being put off ahead of the EU referendum. She said high youth unemployment and low wages were challenges.

"Hopefully the new Programme for Government will set out a clear plan for addressing these issues, but people in Northern Ireland should also realise that remaining within the EU is an important aspect of building our economic future," she said.

And the economist claimed a Brexit was likely to wreak damage on job creation.

"A vote for Brexit is likely to present a huge economic shock for the UK, for Europe and also for Northern Ireland," she said.

"Job creation in a Brexit scenario would prove extremely difficult as uncertainty will rise, investment would fall (both domestic and foreign direct investment) and employers would be forced to rein in spending on labour and capital. Northern Ireland's long-term economic ambitions are already challenging enough without adding another economic impediment to the equation."

Ulster Bank chief economist Richard Ramsey said tackling youth unemployment must be made a priority by the Executive. The figures showed a rate of 17.4% for 18 to 24-year-olds here, compared with a 12% rate in the UK.

Max Mackin, owner of Reactive Recruitment, said it was "not surprising" unemployment had fallen. But he added: "We have witnessed the volatility of the market, with the first round of redundancies at Gallaher's and Aer Lingus job losses in the last 24 hours." He said uncertainty over Brexit meant firms were putting hiring on hold. But he said there would be an uplift after the vote, regardless of the outcome.

Belfast Telegraph