Belfast Telegraph

Northern Ireland growth slows to just 1.1% as Belfast's expansion lags behind UK's other capitals

By John Mulgrew

Northern Ireland's economy grew by just 1.1% last year, while Belfast was also the slowest expanding UK capital city.

New figures from the Office for National Statistics (ONS) show Northern Ireland's GVA (gross value added) growth was outpaced by Britain, which expanded by 1.6%.

However, the economy is still 1.5% larger than it was in 2007, according to Ulster Bank chief economist Richard Ramsey.

And in his analysis of sectoral performance over the last 10 years, food manufacturing increased by 130%, while mining support service activities soared by more than 10 times.

Computer programming saw a surge of 144%.

The poorest performing major sectors included construction - the sector worst hit in the economic downturn, which fell by almost a third. Travel and tour operators fell by 83%.

Mr Ramsey said: "Looking at Northern Ireland's economic growth performance on a GVA per head basis is less encouraging.

"A growing population and record levels of people in work has been the primary driver of Northern Ireland's recovery.

"GVA per head is a more meaningful measure of relative prosperity and productivity.

"Last year real GVA per head expanded by just 0.5%, year-to-year, to £20,000.

"This is over 4% below the pre-downturn peak of £20,858 in 2006. This means that the overall economy may be larger than it was in 2007 but on average each person is worse off."

Overall, Wales grew by 1.9% while Scotland's GVA was up 1.2% year-on-year.

Northern Ireland outperformed four areas, including the North East, South East, East Midlands & Yorkshire & the Humber.

But while Belfast saw growth of 2.3%, its expansion fell well behind Cardiff on 5.7%, London at 5.1% and Edinburgh on 4.6%.

A PwC survey in November showed Belfast has slipped significantly down a list of the UK's top cities to live and work in, falling from fifth to 30th place in just two years.

Mr Ramsey said GVA was likely to fall after next year.

"Using a new methodology, the ONS produced a series of regional GVA (balanced) for the period 1998-2016," he said.

"This included both a breakdown by UK regions and by industrial sector.

"While the focus was on the latest year's figures, there were significant changes to earlier estimates for economic growth using the new methodology.

"Looking ahead, we estimate the Northern Ireland economy will have recorded a similar growth rate in 2017, between 1% and 1.5%.

"But next year the growth rate will probably halve with subdued rates of growth (at or below 1% per annum) in 2019, 2020."

Mr Ramsey said that "a meaningful recovery began in 2014 with the Northern Ireland economy expanding in real terms", after adjusting for inflation.

"This represented the fastest rate of growth in eight years and by quite some margin," he added.

"Economic growth accelerated to 3.0%, year-on-year, in 2015 before slowing to 1.1% in 2016.

"Meanwhile, 2007's annual growth rate has been lowered dramatically from 4.9% previously to 0.9%.

"As a result, it is now clear that the local economy regained all of the output it lost during the recession in 2015."

The latest EY's Economic Eye this month forecast 4.9% growth in the Republic during 2017, compared with just 1.4% in Northern Ireland.

The EY forecast also predicted economic growth in GDP of just 1.1% in 2018. The jobs market is also predicted to expand at a much slower level here, with just 5,800 posts created by 2020.

Belfast Telegraph

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