Belfast Telegraph

Northern Ireland economy lagging behind UK for past 20 years

Esmond Birnie
Esmond Birnie
Margaret Canning

By Margaret Canning

Northern Ireland’s economy has been consistently behind the UK as a whole over the last 20 years, figures have shown.

And 2018 output here has also taken a hit from the loss of tobacco giant JTI Gallaher’s and tyre maker Michelin, which have both shuttered major operations in Ballymena.

However, separate figures on companies show they’re making more sales than ever at home, generating £46.7bn in 2018 — the highest revenues since 2011.

But a more gloomy picture emerges from regional figures about economic performance for the last two decades, published by the Office for National Statistics.

Senior economist Dr Esmond Birnie said the figures show the NI economy was falling further and further behind.

There have been a number of attempts at kickstarting growth in recent years, including a move to rebalance the economy away from the public sector, towards the private sector.

And long discussions have taken place over lowering the rate of corporation tax in Northern Ireland — a possibility which was raised again in the Queen’s Speech on Thursday.

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In the year the Good Friday Agreement was signed, our gross domestic product per head of the population was 79.3% of the UK average.

As the credit crunch took hold, it fell to 82.1% of the UK average though there was a slight improvement in 2018 as it recovered to 80.6% of the UK average.

Dr Esmond Birnie said the report was “bad news” in the run-up to Christmas”. 

He added: “It also perhaps re-emphasises the point that the real political challenge is not simply to restore devolution but to reform the machinery of government and choose policies which are actually appropriate so as to promote better economic performance.”

And the closure of Michelin and JTI Gallaher’s in Ballymena contributed to a slump in output here, according to the ONS. 

It puts GDP in Northern Ireland at just under £49bn or £25,981 per head in 2018. This was a 0.5% fall in real terms from 2017.

The ONS has issued figures for the fall in GDP in each district council area — and they show that the largest fall at 10% was in Mid and East Antrim, where Michelin and JTI Gallaher’s were located.

Meanwhile, sales by companies in Northern Ireland were £68.4bn in 2018, an increase of 3.5% over the year, according to the Broad Economy Sales and Exports Statistics.

Sales at home hit £46.7bn, up 5.7% over the year and the highest level since the survey started in 2011. 

Sales to Great Britain (GB) decreased by £1.1bn to £10.6bn, down 9.3% over the year. Sales to markets outside the UK (exports) increased by £837m (8.1%) over the year, to £11.2bn. 

Sales to all markets outside NI fell by £241m (1.1%) to £21.7bn — the second consecutive year of falling external sales.

The fall was driven by a substantial decline in the cateogry of food, beverages and tobacco –  the closure of the Gallaher’s cigarette factory in Ballymena.

Exports to the Republic of Ireland increased by £330m (8.6%) over the year, to £4.2bn.

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