Northern Ireland news

Slower economic growth blamed on Brexit uncertainty

Danske Bank chief economist Angela McGowan says uncertainty around Brexit is being felt in the economy
Gareth McKeown

UNCERTAINTY over a potential Brexit has dampened investment levels in Northern Ireland and hit economic growth, according to new forecasts from Danske Bank.

The quarterly sectoral forecast report suggests the north's economy will expand by 1.6 per cent this year, down from an expected 1.8 per cent previously.

Slower quarterly growth in the run-up to the June referendum has been caused by heightened Brexit uncertainty but the report notes that there is no reason the private sector should not bounce back if this risk abates.

Danske Bank chief economist Angela McGowan said: “We have already seen the economic consequences of heightened uncertainty around Brexit taking its toll on the exchange rate and investment levels.

"For example, UK commercial property transactions were down 40 per cent in quarter 1 relative to the same period last year. In addition, last month the UK’s manufacturing sector experienced its first contraction since 2013 as uncertainty weighs on this sector.

"The construction sector has also slowed. However, it would be reasonable to conclude that a UK vote to ‘remain’ in the European Union will result in any lost or delayed investment being made good in the second half of the year.”

 

The latest Danske Bank report sees Brexit as the largest threat to economic growth but acknowledges there are other downward pressures on the economy, such as long-term austerity and slower global growth.

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