UP TO 16,000 jobs in the North’s private sector could be under threat as a result of the UK coalition government’s initiative to cut public spending budgets, according to new forecasts.
Business advisers PricewaterhouseCoopers (PwC) are warning that up to half a million private sector jobs could be lost across the UK as result of the comprehensive spending review (CSR) which will be published next week.
PwC believes reduced spending in the public sector will impact on private sector suppliers, with both service and manufacturing firms facing a slowdown in profits and employment.
It says according to new estimates from the UK’s office of budget responsibility (OBR) up to 600,000 public sector jobs could go by 2015/2016.
The OBR has indicated that this could result in total job losses of 943,000 across the public and private sectors in the UK by 2014/15 which is around 3.5 per cent of total employment.
PwC believes that the OBR forecasts are equivalent to 20,000 public sector job losses in Northern Ireland and in a worst case scenario potentially 16,000 private sector job losses.
The business advisers suggest business services and the construction sector in Northern Ireland will be hardest hit by the cuts.
In its latest report published today, Sectoral and Regional Impact of the Fiscal Squeeze, PwC argues that the North cannot afford to lose a further 16,000 jobs.
Esmond Birnie, the company’s chief economist, says to compensate for spending cuts of the proposed magnitude the private sector in Northern Ireland would have to grow by more than 1 per cent each year.
“In the current circumstances this level of growth is virtually impossible.
“Finding new ways of driving private sector growth must now be our overriding priority and embracing the government’s proposed tax incentives will help lure overseas investment and stimulate new and profitable exporters,” Mr Birnie added.
