Local growth forecasts revised upwards
The local economic recovery is well underway and the majority of sectors are now expanding, according to the latest report from Danske Bank published today.
The latest Quarterly Sectoral Forecast report published by Danske reveals that local economic growth should reach 2.6% in 2014 (up from 2.4% in previous forecast) and 2.3% in 2015.
The report highlights a number of positive factors behind this forecast. These include rising employment levels, a recovery in the local housing market, improved confidence, improved credit conditions and the recent rebound in the neighbouring economies of Great Britain and the Republic of Ireland.
Commenting on the report, Danske Bank Chief Economist Angela McGowan said: “It is a case of ‘so far so good’ for the local economy in 2014. In particular the recent improvements in the housing market have provided a welcome lift for the construction sector and helped to boost consumer confidence. Over the year to Quarter 2 we saw new jobs being created in a variety of sectors including agriculture, manufacturing , construction and services, indicating that the recovery is now much more wide-spread across Northern Ireland’s private sector”.
Sectors driving GVA growth
Growth is expected across a broad range of sectors. Administration & Support Services and Construction are forecast to experience the fastest rates of growth in 2014, each expanding by 5.1%. Strong GVA gains well in excess of the 2.6% average for the economy are also expected across a number of other sectors including Professional Services (5%), ICT (4.4%) and Manufacturing (4.3%) in 2014.
Slower growth in public sector
Given the pressures facing NI Executive’s budget the forecasts for Health, Education and Public Administration are well below the overall average at 1.3%, 0.7% and -0.4% respectively.
The report highlights this week’s Scottish Independence vote as by far the largest risk on the horizon, potentially creating volatility for the UK as a whole and disrupting investment. Besides losing some 8.3% of the UK population and roughly 10% of current GDP, there would also be currency and political ramifications.
Ms McGowan concluded: “There is a good story to tell around the private side of our economy as the vast majority of sectors are now expanding again. The overall challenge is of course to grow the private sector significantly more – but that takes time.
“Regardless of the political environment, policy makers in Northern Ireland must stay close to the economic script in terms of focusing on skills, investment, enterprise and infrastructure to ensure that Northern Ireland’s economy can withstand any political storm.”