A NO deal Brexit scenario would be sufficient to push Northern Ireland into full-blown recession, a new economic barometer is predicting.
EY's latest quarterly Economic Eye has revised down the north's growth forecast for 2020 to 1.1 per cent from 1.2 per cent.
But if a deal isn't reached in the current Brexit maelstrom, the report's authors claim growth next year would be minus-0.6 per cent, plunging the region into into recession.
And EY also predicts that a no-deal would result in 60,300 fewer jobs across the island by 2022 - some 18,800 of them in the north.
The findings come on the back of Ulster Bank's latest Purchasing Managers (PMI) index which found that the Northern Ireland economy had either “entered or is entering recession”.
According to EY, the north has now slipped behind the UK average growth rate after a relatively strong 2018, and continues to experience lower levels of growth than the Republic, which is projected to grow at 3 per cent next year before slowing to 2.8 per cent in 2021.
EY Ireland chief economist Professor Neil Gibson said: “The external economic climate is as challenging as it has been for a decade. A no-deal Brexit has the potential to push Northern Ireland into recession and to lead to a contraction in the labour market, which so far has consistently proven wrong some of our gloomier predictions.
“Although estimates of a no-deal impact vary considerably, they all suggest there will be a cost in the form of disruption across the island. There is no doubt that the resilience and adaptability of businesses will be tested, but their resilience thus far without a functioning Executive and in the shadow of Brexit uncertainty offers encouragement.”
Michael Hall, managing partner at EY Northern Ireland, added: “Firms must be ready to react quickly when clarity finally emerges over the nature of the UK’s exit from the EU.
“Low levels of preparedness, particularly amongst smaller firms, is not surprising given the level of uncertainty, but nimbleness and adaptability may be the difference between survival and closure for some.
“Many larger firms have progressed well with basic preparation but more substantial structural changes, understandably, remain largely on hold.
“Looking at new ways of working, sourcing new markets and developing new partnerships and relationships is yielding results already for many firms in Northern Ireland, but not every business has the resources at its disposal to invest in new areas.”
