Business

Northern Ireland's productivity 'among lowest in developed world'

Productivity levels in Northern Ireland are well behind other parts of the western world, according to official figures
Productivity levels in Northern Ireland are well behind other parts of the western world, according to official figures Productivity levels in Northern Ireland are well behind other parts of the western world, according to official figures

NORTHERN Ireland has stopped making things after shock new figures reveal that productivity in the region "is among the lowest in the developed world".

Statistics from the Office for National Statistics (ONS) showed that the productivity gap between the UK and the rest of the western is widening.

And according to Dr Esmond Birnie, the chief economist at PwC in Northern Ireland, it makes the gap between the north and other major countries "very substantial".

Since 2007, Northern Ireland’s comparative productivity has slipped back he said from about 91 per cent to around 87 per cent in 2013.

Dr Birnie's analysis comes as enterprise minister Jonathan Bell faces mounting pressure in particular relation to the performance of Northern Ireland's manufacturing sector.

That was brought back into focus after plane maker Bombardier announced plans to shed more than 1,000 jobs at its Belfast plant.

In a statement at Stormont yesterday, Mr Bell said the executive's economist strategy would be "refreshed to support growth in the manufacturing sector".

There are however some good news stories with trailer manufacturer SDC Trailers claiming production at an all-time with a record number of trailers being made.

However, Dr Birnie points out that overall productivity levels across the UK had worsened since 2014.

"In 2013 the average German worker produced a level of GDP 9 per cent above the UK average but by 2014 that gap had widened to 11 per cent. Similarly, in 2013 the average American worker produced 37 per cent more than the average UK worker – by 2014 that gap had widened to 38 per cent," he said.

And he said the problem was particularly marked in the north.

"ONS’s comparative productivity data at the sub-regional level is not as up-to-date as that for the UK as a whole. Nevertheless, the available data indicate that alongside the widening productivity gap between the UK and much of the rest of the Western world, Northern Ireland’s comparative productivity has been worsening compared to the UK average," Dr Birnie added.

"During the period 2002-7, gross value added (GVA) per job filled in Northern Ireland, a close approximation to GDP per worker, actually increased compared to the UK average, although even at the peak the level of output per head was still about 9% below the UK average.

"Since 2007, however, Northern Ireland’s comparative productivity has slipped back; from about 91 per cent to around 87 per cent in 2013."

Jonathan Bell took to the assembly yesterday to defend the record of the north's manufacturing sector which he said was actually growing, now accounting for more than 80,000 jobs.

“I want to see flourishing manufacturing companies at the heart of a growing economy, with Northern Ireland supplying the world with everything from complex aircraft structures to portable defibrillators and quarrying machinery, to name but three," he said.

"Work is under way in my department on a major refresh of the executive’s economic strategy. I have tasked my officials to put manufacturing at the centre of that new strategy, as one of its major themes."

The plans were welcomed the Unite union but its regional secretary Jimmy Kelly said growth "has been achieved in lower-value added manufacturing sectors while the overwhelming majority of jobs lost have been better paid jobs with higher productivity".

"The challenge is not to simply grow the economy through a race-to-the-bottom, whether that is in regard to wages or on corporation taxes," he added.

“A meaningful growth strategy must focus on investing in the skills and talents of our workers, both young and experienced. It must also include action to lower energy costs – both by the regulator and in bringing forward the long-delayed north-south interconnector."