Positive signs may hold key for recovery, says Arlene Foster
Northern Ireland could have a "landmark" year in 2014 if gradual signs of economic recovery continue, the enterprise minister has said.
The minister spoke as a new economic commentary from the Department of Enterprise, Trade and Investment pointed to growth of around 2% this year, and even stronger growth among trading partners in the UK and the Republic.
The commentary also revealed that regional gross value added (GVA) – a measure of economic output similar to gross domestic product – grew by 1.2% in 2012, compared to 0.5% in 2011.
UK-wide, the average GVA increase was 1.6% in 2012. However, an alternative measure of GVA shows that Northern Ireland has recorded falls in real GVA every year since 2007.
Figures on 'real term' GVA shows that all UK regions experienced falling GVA between 2007 and 2011 – Northern Ireland's was the second steepest slump at 11.3%, second only to 13.6% in Yorkshire and the Humber.
Looking ahead, the commentary refers to other economic research pointing to the Northern Ireland economy growing by around 2% this year – behind the UK's projected growth of up to 3.1% and up to 2.5% in the Republic. Enterprise Minister Arlene Foster welcomed the signs of growth. "While I am aware that we are only in the early phase of our economic recovery, recent figures including the increase in house and car sales provide real confidence that a bottoming-out has occurred and we are beginning our upwards journey."
She said improved labour market figures also provided a positive sign of the year to come.
The minister added: "In many ways 2014 could be a landmark year. This autumn, the UK government will make a decision on devolving corporation tax to the NI Executive which, if granted, could allow us to rebalance our economy in terms of growing our private sector much quicker than would otherwise be possible."
The commentary also refers to the Northern Ireland composite economic index, which reported a 1.6% increase in economic activity in the third quarter of 2013, compared to the quarter before. But economic inactivity had increased in only two of the last four quarters, and was still 9.5% below its 2007 peak.
The third quarter also saw growth in the services sector and some classes of construction sector output. Services also claimed two thirds of employee job growth in the quarter to September last year.
Northern Ireland's unemployment rate for September to November was 7.3% – slightly higher than the UK rate of 7.1%. Earnings growth was only 0.5% over the year, and the full-time pay gap with the UK widened to £57.50. Living standards in Northern Ireland were also considerably lower than the UK – the third lowest of the 12 UK regions.