Northern Ireland economy to have worst economic growth across UK in 2019
Northern Ireland will have the worst economic growth among the 12 UK regions next year after an underwhelming performance in 2018, according to a report.
Business advisors PwC's economic outlook today said Northern Ireland's growth in 2018 is likely to be joint-lowest with Scotland at 1%.
Next year, the province's growth is expected to pick up only slightly to reach 1.1%. But it would be overtaken by growth in Scotland of 1.2% and UK average expansion of 1.6%.
PwC NI chairman Paul Terrington said its study of figures from the Office for National Statistics demonstrated a continued slowness in the economy.
"Between 1998 and 2007, Northern Ireland was the second fastest-growing region after London, but suffered the greatest reversal in the immediate aftermath of the financial crisis."
And its outlook suggests Northern Ireland's recovery since the financial crisis is slowing down.
PwC's outlook cited data from the Office for National Statistics showing that Northern Ireland's unemployment rate had fallen by 1.2% during 2017, the worst fall of the 12 regions. The East Midlands and Yorkshire - which fell by 0.6% and 0.2% respectively - were the only other regions where the employment rate contracted.
But PwC said Northern Ireland's manufacturing sector had made a strong contribution to economic growth between 2009 and 2016.
The sector's contribution to gross value added (GVA) grew by around 1.4% over the period, well ahead of the UK average of 0.6%.
But in the same seven-year period, the province had the second-lowest increase in the economic contribution of professional, technical and scientific services, suggesting a lack of new jobs in higher-paid professions.
In the UK as a whole, real consumer spending growth is expected to shrink from around 1.8% in 2017 to 1.1% in 2018.
John Hawksworth, chief economist at PwC, said: "Consumer spending accounts for more than two thirds of UK GDP, making it the most important driver of UK economic growth.
"But it has slowed significantly recently as higher inflation has squeezed consumer spending power and it looks set to remain sluggish in the short term, dampening overall GDP growth.
"Looking to the 2020s, however, growth could return to its long-term trend rate of around 2% if the UK can negotiate a favourable future deal with the EU and automation boosts domestic productivity growth and holds down prices.
"The pattern of consumer spending will continue to evolve in the longer term, with our projections suggesting that housing and utilities will continue to eat up more of household budgets, while spending on other essentials like food and clothing tends to decline."
PwC also said housing and utilities would continue to cost more, and would account for 30% of household budgets by 2030, compared to around 27% in 2017.
And consumers would also be spending more on financial services and personal care.
However, the share of spending on clothing, food, alcohol and tobacco, and transport, would drop.