Economy constrained by Brexit and global slowdown, says bank
Brexit uncertainty will continue to drag on Northern Ireland's economic growth with expansion of 1% expected this year, according to a report today.
Danske Bank's quarterly sectoral forecasts report said there had been no major increase in momentum in the first quarter.
Services output fell over the quarter, and, while production activity increased, Danske Bank said the growth was likely linked to stockpiling in anticipation of the original Brexit deadline.
The report also predicts growth of 1.3% for the economy here in 2020.
And it said that the information and communication, administration and support and professional services sectors are expected to be the fastest growing over the next two years.
"Consumer spending is projected to pick up, boosted by rising wages and a moderation of inflationary pressures," said Danske Bank chief economist Conor Lambe.
"But Brexit-related uncertainty is likely to continue to drag on business investment, and the slower pace of global economic growth is expected to weigh on exports."
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Danske Bank expects the manufacturing sector to hold at 0.9% growth this year. It said signs of strong growth at the start of the year had likely been driven by Brexit-inspired stockpiling ahead of March 31. It does not expect the rate of activity to be sustained through the remainder of 2019.
The bank also revised down its forecast for the construction sector to 1% in 2019 and 1.1% in 2020 on the back of weak performance in the final quarter of 2018.
Public administration and defence continues to have the weakest outlook of all the sectors of the local economy.
Output is expected to contract by 0.5% in 2019, and by a further 0.3% in 2020.
Danske Bank has forecast that the information and communication sector will see the fastest employment growth this year, with the number of jobs expected to rise by 2.9%.
Mr Lambe said that Brexit and political uncertainty remain the two biggest risks to economic growth.
While he said a no-deal Brexit scenario remains a possibility, the economist predicted that an extension to Article 50 will be the more likely outcome.
And we would continue to feel the effect, he added: "Until an agreement is reached, the political stalemate will continue to act as a drag on business investment and consumer confidence."