Belfast Telegraph

Northern Ireland remains a 'deficit economy' with poor productivity

By Margaret Canning

Northern Ireland remains a "deficit economy" that continues to import more than it is able to sell overseas, a report has shown.

New data from the Northern Ireland Statistics and Research Agency (Nisra) gives the province a GDP figure for the first time, at £37.2bn.

The value, which relates to 2012, measures consumption, investment, government expenditure and exports minus imports.

PwC chief economist Dr Esmond Birnie said the largest spend related to household consumption, at £27.5bn.

The annual business inquiry from Nisra - a measure of activity across all business except financial services - also showed expansion in average growth value added (GVA) for both services and construction between 2013 and 2014.

The key contributor to the growth in average GVA was the services sector - everything from restaurants to estate agents - which grew by £307m to £7bn.

It was also the biggest contributor to employment growth.

But in industry terms, construction showed the biggest growth of £151m or 9.7%.

But both the production and distribution sectors showed a negligible change in GVA.

Employment increased by around 2.2% to 537,970 in 2014 from 2013.

As the biggest contributor, services added 7,386 jobs between 2013 and 2014.

And construction ended a five-year drought by growing jobs by 1,650 between 2013 and 2014.

Dr Birnie said the figures showed Northern Ireland had only a low investment rate, with gross capital formation at around half the UK average.

The economist added: "To the extent that investment determines future economic growth, this result is striking and worrying, although not surprising.

"It reflects a relatively small and relatively low-productivity private sector."

And he said the province's status as a deficit economy was in line with other indicators.

Northern Ireland's total external sales were £18.3bn but total imports (including purchases from Great Britain) were higher at £24.9bn.

Dr Birnie said that GDP per head was 78.5% of the UK average level.

Belfast Telegraph