Belfast Telegraph

Economists upbeat on Northern Ireland's future growth


Northern Ireland's economy is ending 2013 in better health than a year ago and while the outlook for the year ahead is positive, there's no room for complacency.

That's the consensus from local economists who point to an increase in output, reduction in unemployment and a more confident consumer as providing grounds for optimism.

The positive view is dented slightly by growing concerns over the rising cost of living and a still-difficult lending environment which has weighed on the prospects for some industries such as construction, but there is no doubt the economy is in a healthier state.

"There is now clear evidence that Northern Ireland is recovering from the lingering effects of the financial crisis," PwC said in its latest Northern Ireland Economic Outlook (NIEO).

Economist Esmond Birnie from the firm said he expects the economy here to grow at its fastest rate since 2007 and expand by around 1.6%. Danske Bank agreed, pointing to a favourable run of data over the latter part of 2013 as well as signs the global and UK economies have gone from strength to strength.

"Compared to this time last year the economic outlook has significantly improved and it appears that a true recovery is under way," Danske Bank Chief Economist Angela McGowan said.

"The local economy has seen a number of major job-creation announcements during 2013, consumers are more confident and the main economic indicators are now all pointing in the right direction."

But Ms McGowan has warned that a healthy 2014 depends on help from the Bank of England in keeping interest rates low and from the Stormont Executive, which needs to support enterprise, boost skills, built and maintain infrastructure, and attract inward investment.

Richard Ramsey, Chief Economist for Northern Ireland at Ulster Bank, points to the bank's Purchasing Managers Index for proof the economy is in better shape.

The latest PMI for November showed Northern Ireland companies were not missing out on the economic recovery being experienced across the UK with output growing at the fastest pace since March 2004.

"This provides some indication of the scale of the turnaround that a growing number of local businesses are now experiencing.

"Furthermore, there are no signs that this pick-up in activity is set to fade," he said.

However, the rising cost of living is expected to drag on any economic growth, according to PwC.

"With wage increases continuing to lag behind inflation, and continued pressures on energy and other costs, squeezed households may not feel the direct benefits of recovery," PwC's NIEO said.

Belfast Telegraph