Belfast Telegraph

Incomes falling by close to £2k per year despite jobs growth

By Margaret Canning

Average Northern Ireland incomes are falling at a rate of nearly £2,000 per year as the economy continues to lag behind the rest of the UK, according to a forecast.

PwC UK economic outlook also said house prices were 44% behind their pre-recession peak and would remain below those of other UK regions for at least another three years.

Based on the year so far, PwC forecast that prices would rise by around 1% during 2017, compared to a UK average of nearly 4%.

The latest Northern Ireland House Price Index from Land and Property Services and Nisra - covering the first quarter of the year - reported a standardised house price for the province of £124,007.

That was down 0.8% on the previous quarter.

And PwC said wages had also fallen in real terms in Northern Ireland and were still only 94% of their 2005 levels - even though employment had surpassed its pre-credit crunch peak.

Real household disposable incomes were at only 89% of their 2005 level - equivalent to an annual income cut of £1,810.

The most recent figures from the Office for National Statistics (ONS) put Northern Ireland's gross disposable household income for 2015 at £15,913, compared to a UK average of around £19,000. In comparison, the income level in 2005 was £12,723 - but does not take account of the effects of inflation.

Job creation in Northern Ireland is not being accompanied by wealth creation, PwC said.

It said there was huge disparity in how the regional housing markets have performed since the recession.

Senior economist Richard Snook said: "Those local authorities that have experienced the greatest falls in house prices since 2007 are all based in Northern Ireland, while London dominates biggest risers with all boroughs experiencing price growth of over 50%."

PwC said that UK-wide the economy would see consumer spending and business investment take a hit from Brexit uncertainty.

Britain's gross domestic product (GDP) is expected to drop from 1.8% growth last year to 1.5% in 2017 and to 1.4% in 2018.

The firm has downgraded its previous prediction for 2017 when it pencilled in GDP to ease at a slower pace to 1.6%.

Belfast Telegraph