Northern Ireland’s economic prospects look favourable for the first time in many years, with Northern Ireland Centre for Economic Policy forecasting 2.8% growth and 13,600 net new jobs this year (2014) and 2.9% growth and a further 9,600 net new jobs in 2015.
These economic numbers will also support a continued increase in house prices which are forecast to rise by 6.7% this year and a healthy 8.5% next year.
Gareth Hetherington, Associate Director at Northern Ireland Centre for Economic Policy said: “The Northern Ireland economy enjoyed a welcome change of direction last year and the prospects for the remainder of 2014 and into 2015 are positive.
“The number of people in employment accelerated in the last nine months and this is forecast to continue throughout this year.
“Home owners are also likely to enjoy rising property prices and we can say with confidence that the property market has finally turned the corner.”
But is the recovery built on sand?
The recovery to date has been very reliant on the consumer. The business investment and export led recovery evident in economies such as Germany has not materialised in the UK.
With interest rate rises putting pressure on the consumer and Government austerity here for the long term, this recovery will be short-lived without accelerated growth in the business sector and improved trade performance.
This means there is no time for complacency in policy making circles and measures to support enterprise, reduce business costs and attract Foreign Direct Investment are vital for a sustained recovery.
Gareth Hetherington said: “It may seem churlish to be warning of longer term risks just as an improved economic forecast is being made for 2014, but with potential economic challenges already visible on the horizon, there is a lot of hard work ahead for Government if this recovery is not to run out of steam.”
Time for an honest debate – our fiscal deficit demands it
The fiscal deficit represents the amount by which Government spending exceeds revenues from taxation in any given year. Recently published data has allowed Northern Ireland Centre for Economic Policyto estimate the Northern Ireland fiscal deficit for 2012/13 at approximately £9.4 billion, that’s over £5,000 for every person in Northern Ireland.
Gareth Hetherington said: “Although we are not required to re-pay this annual deficit, it is a vulnerable position for Northern Ireland to be so reliant on other parts of the UK to fund our standard of living to this extent.
“This information puts in stark context the need for an honest debate about the structure of our economy, how we increase our tax base by growing the private sector and how we deliver and pay for public services.”