Money ‘is not being spent’ amid impasse at Stormont
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