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Could Northern Ireland's economy be sparked back to life?


Government figures show 2013 witnessed a growth of 1.2%

Government figures show 2013 witnessed a growth of 1.2%

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Government figures show 2013 witnessed a growth of 1.2%

Northern Ireland's economy suffered a decline for the sixth year running in 2013 - but it is predicted to show modest growth in the final analysis of this year.

The latest government figures show 2013 witnessed growth of 1.2% - but in real terms, taking inflation into account, Northern Ireland actually saw a decline of 0.5%, according to one economist.

Ulster Bank's Richard Ramsey said Northern Ireland's economy is now around 8% smaller in real terms compared with 2007.

"There have been six consecutive years of retraction - that's something Northern Ireland has never experienced," he said.

"The latest figures from the Office for National Statistics confirm that Northern Ireland didn't grow in 2013.

"Northern Ireland felt it the most, and was hit harder than anywhere else in the UK.

"Although there was a recovery in the business sector, households were experiencing lower wage growth."

The figures from the Office for National Statistics were included as part of an overall analysis by the Department of Enterprise, Trade and Investment.

Their economic commentary for December showed a marked improvement for many sectors in Northern Ireland - year-on-year.

The services industry witnessed a boost of 2.6% to the second quarter of 2014, with manufacturing benefiting from an almost 6% rise.

But the construction industry - often used as a barometer of how an economy is performing - fell to a new low in the second quarter of 2014.

However, the figures only relate to output in Northern Ireland, with other measures suggesting that the industry may be improving through work outside our own shores.

The report also said economic activity still remains well below its pre-recession peak back in early 2007 - with Northern Ireland trailing behind the rest of the UK.

And while Northern Ireland is predicted to grow in 2014, that upwards curve could flatten out during 2015, according to Mr Ramsey. Varying predictions place growth for this year at between 2% and 2.5%.

"I don't think we will see the same levels of foreign direct investment in 2015, thanks to things like changes in state aid for firms," he said.

Invest NI, the region's economic development agency, spent £467m during the course of 2013/14 - the second highest funding period in its history.

"There will be a few key challenges next year, and we won't see the level of investment we have already seen," Mr Ramsey said.

"The initial part of the recovery is the strongest - it's the easy yards that are done first, before it slows down again.

"We won't get the same level of export growth in 2015, as we did in 2014.

"Government cuts will come in and become more of a drag on the economy."

He also said any benefits from the devolution of corporation tax to Northern Ireland would not be felt for some time.

If control over the business tax is handed over to Stormont, it's unlikely to come in to effect for at least two years.