Belfast Telegraph

Concerns for Northern Ireland's long-term economic view despite year-on-year growth

Encouraging: Jordan Buchanan
Encouraging: Jordan Buchanan
Margaret Canning

By Margaret Canning

Growth in the Northern Ireland economy over the past year has been powered by "resilient" firms in the private sector, it has been claimed.

But the rate of growth in the economy has slowed down over the past few years compared to the UK as a whole, according to the composite economic index for the third quarter of last year.

Over the last two years, the index recorded annualised economic growth of 0.5%, compared to 1.6% for the previous period.

Private sector output grew by 0.6% over the quarter and by 2.5% compared to a year earlier.

As an economic measure, the NICEI can be compared to GDP - which in the UK as a whole, has expanded by 1.5% over the last few years.

But there has been shorter-term growth. Activity grew 0.4% from the second to the third quarter of 2018, while it was up 2.1% over the year to quarter three.

Quarterly growth was driven by the production and construction sectors though there was also a slight fall in growth in services.

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However, all sectors contributed to the year-on-year growth of 2.1%, with the production sector leading the way with growth of 1.0 percentage points.

Ulster Bank chief economist Richard Ramsey said Northern Ireland economic output is now on a par with mid-2005.

But he said the figures raised concerns over productivity, as there were an extra 69,000 jobs in the economy, producing the same output.

Employee jobs had grown by 2,240 over the quarter and by 17,400 over the year - growth of 2%.

Jordan Buchanan, economist at the Ulster University economic policy centre, welcomed the positive growth.

"It is particularly encouraging that growth has come from the private sector, highlighting the resilience of our businesses which are operating in an increasingly difficult economic environment," he said.

"However, taking a longer term view, the local economy remains on a low growth trajectory lagging behind UK counterparts and even more so our neighbours in the Republic of Ireland.

"Indeed, total economic output is almost 5% lower in Northern Ireland compared to peak levels in 2007.

"Looking forward, the latest forecasts from the Ulster University Economic Policy Centre suggest the Northern Ireland economy is likely to continue to grow at less than 1% per annum over the next few years."

The index, which is presented by the Northern Ireland Statistics and Research Agency (NISRA), said: "When looking at this annualised trend over the last three years there is evidence that the rate of growth has slowed."

Belfast Telegraph