Economic recovery here to be sluggish and tough: PwC
Northern Ireland's economic recovery will be "sluggish, protracted and tough", a firm of business advisers said today.
PricewaterhouseCoopers' latest Northern Ireland economic outlook predicted the economy would grow by only 0.2% in 2012 - around a third of the UK growth rate - with an improvement to 1.4% the year after.
But even that was still below pre-recession activity and not enough to stimulate new jobs, PwC said. The outlook follows Wednesday's jobless figures, which showed the unemployment rate was down to 6.5% but that the number of people claiming unemployment benefits had grown by 200 to 61,400.
Dr Esmond Birnie, PwC's chief economist in Northern Ireland, said: "UK public spending reductions and further spending constraints in Northern Ireland are likely to be more keenly felt in 2012 than in 2011, so public sector investment and jobs will continue to come under pressure."
He predicted that a past creation of 130,000 new jobs - in retail, house building, services and the public sector - in the decade to 2008 would not be repeated.
"As exports have contracted, demand has fallen and public spending has been cut, thousands of these jobs are no longer sustainable."
Mr Birnie said recovery would be based on research and development, high-value exports and redoubling efforts to attract new inward investment.
He added recovery "will be sluggish, protracted and tough. The private sector must recognise that exporting goods and high-value service to the world's fastest-growing economies is the only way to accelerate recovery, growth and jobs".
He said pressure on public sector jobs and investment was "the new normal" - but he said the Executive's economic strategy had been correct to identify exports as the key to growth.
While exports to America had risen from 12% of total exports to 18% since 1996, Mr Birnie said goods being sold to the fast-growing BRIC (Brazil, Russia India and China) nations were "worryingly low" at 2%.
Mr Birnie added: "Doubling the share of Northern Ireland's total exports going to the BRICs should be an immediate short-term goal and doubling it again inside five years should be a priority."