Economic growth to double in Northern Ireland, but still lag behind rest of UK
The rate of economic growth in Northern Ireland will double next year thanks to strong consumer and net trade growth, according to a major forecast.
The EY Economic Eye Winter 2013 said the economy would see growth of 1% in GVA this year, increasing to 2% next year and 2015 – a revision up from 1.7%.
Business advisors EY also predicted business investment would grow strongly from next year.
However, growth in the Republic's economy would lag behind slightly, with its 2014 and 2015 forecasts downgraded to 1.7% and 1.9%. That was due to more austerity south of the border – though the report's authors also said higher inflation had brought its own austerity to the UK and Northern Ireland.
But despite the growth forecast for Northern Ireland, the economy needed serious measures if it was to keep up with healthier UK growth, according to EY managing partner Michael Hall.
"Economic recovery is at last underway in Northern Ireland, with employment levels rising and confidence returning," Mr Hall said. The rate of recovery is forecast to be below the corresponding rate in the UK and many consumers will experience little improvement in 2014.
"Devolution of corporation tax powers, or something similarly game-changing would be required to move the economy onto a higher growth trajectory."
And its traditional economic challenges were persisting, according to Mr Hall, namely "dependence on public spending, compounded by the small size of its private sector and export base".
The scale of Northern Ireland's export base, except for the powerhouse agri-food sector, was smaller than the Republic.
Great Britain still accounted for 60% of trade from Northern Ireland, followed by Europe at 11%, the Republic at 10% and North America at 8%.
Mr Hall said: "Exports remain crucial to the fortunes of the all island economy."
Jobs are increasing, with manufacturing leading the way.