Money ‘is not be­ing spent’ amid im­passe at Stor­mont

Belfast Telegraph - Business Telegraph - - News - BY JOHN MUL­GREW

A LACK of de­volved gov­ern­ment is ham­per­ing eco­nomic growth and stop­ping key money be­ing spent across North­ern Ire­land, a re­port has warned.

But the lat­est quar­terly eco­nomic sur­vey from Danske Bank still pre­dicts that the North­ern Ire­land econ­omy will grow by 1.2% this year, and by 1% in 2018.

Danske Bank said al­most all sec­tors of the econ­omy are ex­pected to grow, both this year and next year, with the ex­cep­tions of public ad­min­is­tra­tion and de­fence.

Conor Lambe, Danske Bank econ­o­mist, said: “With busi­nesses wary of in­vest­ing in a cli­mate of Brexit-re­lated un­cer­tainty, as well as the UK gov­ern­ment con­tin­u­ing with its pro­gramme of fis­cal aus­ter­ity, growth is likely to re­main sub­dued over the next cou­ple of years.”

The re­port also sug­gests that in­ter­est rates could rise rel­a­tively soon. But Mr Lambe said there re­mains a “num­ber of risks and un­cer­tain­ties which could im­pact upon the fore­casts”.

“These in­clude the lack of progress on im­por­tant ar­eas such as fi­nal­is­ing and be­gin­ning to im­ple­ment the In­dus­trial Strat­egy and mak­ing de­ci­sions lo­cally about how to spend the money al­lo­cated to North­ern Ire­land by the Con­ser­va­tive-dup deal fol­low­ing the gen­eral elec­tion,” he said.

The ma­jor­ity of sec­tors are ex­pected to see a rise in out­put. How­ever, the bank has re­vised down­wards growth pre­dic­tions for man­u­fac­tur­ing, to 1% in 2017.

“De­spite the de­pre­ci­a­tion of ster­ling hav­ing a pos­i­tive im­pact on some ex­port­ing busi­nesses, com­pa­nies that im­port a sig­nif­i­cant amount of raw ma­te­ri­als are fac­ing in­creased cost pres­sures from the weaker ex­change rate,” Danske Bank said.

Ac­cord­ing to the re­port, the ma­jor­ity of sec­tors will ex­pe­ri­ence a boost in job num­bers this year, ris­ing by 0.8%.

How­ever, the re­port says num­bers are ex­pected to re­main flat in 2018. It says the largest growth will take place in in­for­ma­tion and com­mu­ni­ca­tion, with a 2.7% rise, and pro­fes­sional sci­en­tific and technical ser­vices, with an in­crease of 2.5%.

Warn­ing: econ­o­mist Conor Lambe

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