NI Slips Behind The Rest Of The UK

Northern Ireland is slipping behind the rest of the UK in just about every measure of employment, growth and productivity, according to the latest economic outlook from advisors, PwC

Their Northern Ireland Economic Outlook (NIEO), published today says Northern Ireland has the lowest level of business confidence amongst the 12 UK regions, the second highest level of unemployment and long-term unemployment that is almost double the UK average.

In addition, the Economic Outlook says that forecast growth in the region during 2013 is now the lowest of the 12 UK regions at 0.4%, with unemployment expected to rise during the year.

The NIEO also reveals underlying concerns about negative equity in the private property sector, rent arrears in the public sector and the impact of welfare reform, all of which add to the pressures on the regional economy.

Amongst the few nuggets of better news are a stellar performance of Belfast’s visitor, hotel and tourism sector during 2012, modest growth in food processing and some remarkable export wins from a small number of Northern Ireland’s top-performing manufacturers.

Dr Esmond Birnie, PwC chief economist in Northern Ireland says the region is beginning to pay the price for a generation of public sector dependency: "The public sector is suffering from the impact of the UK-wide austerity programme and is probably struggling to deliver the objectives it set in the Programme for Government.

"Despite some remarkable export performances by a small number of our bigger manufacturing companies, the private sector lacks the critical mass to make up the shortfall on public expenditure.

"A combination of other pressures like the property, crash, five years of zero or below-inflation pay rises, welfare reform and a lack of productivity are merely adding to the pressures on the public and private sectors and on households.

"Northern Ireland is gradually slipping behind the rest of the UK in just about every measure of employment, growth and productivity and there is no obvious solution that will arrest this slide."

PwC says that claimant count unemployment has increased steadily over the past three years, with 9,800 jobs lost in the 36 months to January 2013.

However, the report says that claimant count unemployment has risen faster in the year to January 2013 – up by 3,800 – than in either of the previous two years, with January 2013 having the highest level of reported redundancies since 2009.

This is in contrast with the rest of the UK where the number of people in work has risen by close to 1 million; albeit with significantly more part time and significantly fewer full time jobs than before the recession.

PwC says that much of the employment growth in GB can be attributed to an increase in self-employment- up from 3.8 million pre recession to around 4.2 million now, with around 970,000 new company registrations in the past two years alone.

(CD)