Belfast Telegraph

Political courage needed to make some hard decisions in Northern Ireland

By Esmond Birnie

Yet more job losses. Yesterday's announcement regarding administration of parts of the Lagan Construction Group could place up to 200 jobs at risk.

This comes on top of job reductions announced relating to Schlumberger, WiS Administration, Kilroot power station, Wrightbus, Acheson and Glover.

In total up to 900 jobs could be going. Especially for the families involved, this is a very bad start to 2018.

This spate of closures and redundancies comes against what had been a fairly good recent performance in terms of jobs growth.

In the year to the autumn of 2017 total manufacturing employment actually grew by 7,000. Construction jobs were also up last year - by 5%.

There was, admittedly, a marked slowdown in the growth of private services but that came after very rapid gains in 2016. The recent job losses need not imply that we are about to enter a recession but they may reflect a slowdown in the growth of the Northern Ireland economy which perhaps started as early as 2014-15.

Whatever the extent of Brexit uncertainty, stutters in the regional economy seem to have pre-dated the June 2016 referendum.

With its proportionally large state sector, the slowdown in growth in public sector employment is now acting as a drag on overall economic growth.

In terms of the private sector, the recent job announcements demonstrate that even some world class companies with strong export sales are now struggling to maintain sales.

This will be even more true for the large number of Northern Ireland businesses which are further behind the international performance frontier.

How far would a return to devolved government help given that any form of uncertainty is not helpful and 'no government' is doing some reputational damage? It would be helpful to have local eyes on local policies but it would be no panacea.

Some very hard but necessary decisions may be necessary about economic policy. It remains to be seen if there is sufficient political courage to make those decisions such as raising tuition fees to help pay for universities, increasing some other local charges to finance basic infrastructure and re-balancing electricity charges between industry and households.

Esmond Birnie is a senior economist at Ulster University's Economic Policy Centre

Belfast Telegraph

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