Belfast Telegraph

Economic growth faces slump to 1.1% by 2019

By Margaret Canning

Economic growth in Northern Ireland will be sluggish at around 1% for the next few years, according to a new outlook.

The Ulster University Economic Policy Centre (UUEPC) Winter Outlook said 2017 GVA growth was estimated at 1.4% but would fall to 1.2% in 2018 and 1.1% next year.

It would not surpass 2017 levels until 2021, when expansion would hit 1.5%.

And the report's economists also forecast a slowdown of growth in the housing market from 2017's 4.4% to below 4%.

But economies here and in the UK would be buoyed by international growth, it was predicted.

UUEPC director Gareth Hetherington said: "For the first time in several years the three engines of global economic growth - the US, China and the EU - are all posting higher growth at the same time. This is providing some relief to both the UK and Northern Ireland economies as increased exports are going some way to offset the squeeze in consumer spending.

"Locally, the retail and hospitality sectors are also enjoying the benefit of a more competitive exchange rate and we are currently witnessing a significant increase in investment in the hotels sector."

But he said the rosy international picture could not off-set the challenges from the lack of Executive, a squeeze on incomes and slowing job growth.

The outlook reports Northern Ireland has become increasingly dependent on migrant labour, with overseas workers accounting for 10.2% of the workforce in 2016, compared to 4.7% in 2004.

Mr Hetherington said a fall in the supply of migrant labour could present challenges to companies, who would have to either offer higher wages, increase investment in labour-saving technology or move to other jurisdictions with easier access to foreign labour.

UK-wide, it forecast that growth will hover at around 1%, reaching 1.7% in 2012.

And the UUEPC also predicts gradual increases in the Bank of England interest rate, moving from its present 0.5% to 2% by 2021.

Belfast Telegraph

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