THE gap between productivity levels in Northern Ireland and the rest of the UK has closed, new research from Queen’s University suggests.
The north has traditionally lagged behind Britain and the Republic when it comes to its levels of productivity, which is a measure of the economic output generated per worker.
But a new study published today by Queen's Business School, found that gap “has closed significantly”, with the north going from the poorest performing region (12th) in the UK during 2020, to seventh in the 2021 ranking.
However, the academics behind the ‘Northern Ireland Productivity Dashboard 2023’, said their research suggests the improvement is unlikely to persist in the long-term, linking it to repercussions arising from the Covid-19 pandemic.
The research was carried out by Dr David Jordan, Ruth Donaldson, and Professor John Turner on behalf of the NI Productivity Forum, based at Queen’s Business School.
The most recent data they analysed suggests productivity in the north is 11% below the UK average.
- Angela McGowan: After autumn statement, we must now focus on delivering growth and prosperity
- Slowdown in private sector saw north's economic output contract in second quarter of 2023
- Invest NI will ‘pivot from job creation to raising productivity' – interim chair
Northern Ireland also lags behind the Republic, where productivity is around 8% higher than the UK average.
“Low productivity remains the biggest long-term challenge facing Northern Ireland’s economy,” said Dr Jordan.
“While the most recent data shows Northern Ireland closing its productivity gap to the UK level, our dashboard shows this has not been reflected in the underlying drivers of long-term productivity growth.
“We think this closing of the productivity gap reflects the disruption associated with the Covid-19 pandemic, rather than a fundamental improvement in the performance of the local economy.”
The dashboard was one of two reports launched at Queen’s University on Friday at an event to mark UK Productivity Week.
Elsewhere, the research found the number of individuals in the north with a third-level education continues to close on the UK average, reflecting a long-term improvement.
But, while improvements have also been made in respect of people with little or no skills in Northern Ireland, an attainment gap persists, with the north recording almost double the UK average for people with no or low skills.
The research also found 31% of small and medium enterprises (SMEs) rated political uncertainty and government policy as a major obstacle in running their business as they would wish in the next 12 months.
That compared with the UK average of 27%.
Meanwhile, there has been a significant improvement in 5G mobile coverage, with coverage almost doubling and narrowing the gap with the rest of the UK.
Ruth Donaldson from Queen’s Business School said: “This is the second year the Northern Ireland Productivity Forum has published its dashboard, and there has been a slight worsening of Northern Ireland’s performance since last year across the 18 productivity drivers.
"However, it is welcome that despite lagging behind the UK average in 14 areas, more drivers are showing both short and long-term improvement.”