The North’s economy is expected to grow by just 1.0 per cent this year against the backdrop of ongoing Brexit uncertainties, political stalemate at Stormont and only a slight pick up in consumer spending, according to a new economic forecast.
Danske Bank’s latest Northern Ireland Quarterly Sectoral Forecasts, published on Thursday, outlines that economic growth will be modest at best but it also predicts that nearly all sectors of the economy, bar public administration and defence, will show definite growth.
Although even modest growth will be welcomed in the North, Conor Lambe, Danske Bank chief economist, said in comparison to the UK overall, Northern Ireland will lag behind.
UK growth rates overall could hit 1.6 per cent this year which Northern Ireland is not likely to meet next year either, according to Danske, which is predicting the economy to grow by 1.2 per cent in 2019.
“Brexit-related uncertainty is likely to continue to weigh on business investment as companies still face uncertainty around their future, long-term access to EU markets. But, on a more positive note, the global economy is performing strongly and this should provide some support to exporting businesses this year,” Mr Lambe said.
Vulnerable
He has also warned that the North’s economy remains particularly vulnerable to a number of risks and uncertainties in the year ahead “including continued political uncertainty in Northern Ireland, Brexit and fiscal tightening”.
Mr Lambe added: “Stormont’s political stalemate is continuing into a second year, with seemingly no current prospects of restoring the devolved institutions. The lack of political representation has led to the postponement of big issues such as healthcare reform, and the length of the impasse has caused frustration within the Northern Ireland business community.”
Danske expects that the administration and support sector will be the fastest growing sector in Northern Ireland this year, expanding by 3.5 per cent, followed by the information and communication sector , which could grow by 3.4 per cent and the professional, scientific and technical services sector, which is predicted to expand by 2.6 per cent.
The bank is forecasting that job creation will slow in the North during 2018 with the number of employee jobs expected to increase by just 0.4 per cent in 2018.
Housing market
Meanwhile, another new report on Thursday from the Royal Institution of Chartered Surveyors and Ulster Bank suggests that the current“political environment” is also impacting on the local housing market.
The number of newly agreed sales dropped last month while there also was a slowdown in buyer enquiries.
But during the first quarter of the year Northern Ireland also recorded the strongest pick up in house prices across the UK according to the RICS, although it has warned that the outlook for sales is flat.
RICS residential property spokesman, Samuel Dickey, said: “There is continued upward pressure on prices with the lack of supply a factor, albeit that there has been a modest pick-up in but the number of properties coming onto the market.
“For the second month in a row, the survey indicates that there has been a dip in new buyer enquiries, but this is likely, at least to some extent, to reflect the particularly bad weather we had in March. That said, the economic and political environment is not short of uncertainty, which could be causing some people to pause regarding their homebuying intentions.”
