'Underwhelming' growth expected for north's economy
ECONOMIC growth has stalled in the north and only a marginal improvement is expected in 2019, according to new figures from Danske Bank.
The Bank's latest quarterly forecast suggests that a number of factors have acted as a drag on growth in the north, including inflation, adverse weather conditions and the continuing political uncertainty in relation to Brexit and the lack of a Stormont Executive.
Danske Bank is forecasting an "underwhelming" two years for the Northern Ireland economy, with growth of 0.9 per cent in 2018 and 1.1 per cent in 2019 - well below the corresponding UK projections of 1.3 per cent and 1.4 per cent respectively. The Bank does, however expect labour force growth to continue, with the number of employee jobs forecast to increase by 0.7 per cent in 2018 and 0.2 per cent in 2019. The growth comes on the back of the highest annual increase in the overall number of employee jobs since the series began in 2005.
The Bank is forecasting that the unemployment rate in Northern Ireland will average 3.3 per cent in 2018, but rise to 3.6 per cent in 2019.
Danske Bank chief economist, Conor Lambe said the Northern Ireland economy experienced a "sluggish" start to the year.
“The economy is expected to perform slightly better in the rest of the year, but consumers and businesses are still facing challenges," he said.
"Household spending power is slowly recovering, but consumers remain under some pressure and heightened uncertainty surrounding Brexit is negatively affecting business investment. These factors are likely to lead to underwhelming economic growth in both 2018 and 2019."
“Northern Ireland has now been without a devolved government since January 2017 and concerns remain over the lack of local decision-making and inadequate representation in the Brexit process. This political uncertainty is negatively impacting both consumer and business confidence," he added.
Within the economy the services sector is expected to remain the main driver of growth, with strong performances forecast within a number of key areas. Construction growth in Northern Ireland is forecast at 0.9 per cent in 2018 and 1.3 per cent in 2019, following a strong end to last year, while in manufacturing, growth is predicted of 0.7 per cent and 1 per cent for the two years.