North’s economy lags Republic and Britain

The annual growth rate in Northern Ireland was 1.6 per cent last year – significantly below the average UK rate of 1.8 per cent and well below the equivalent growth rate in the Republic of 5.2 per cent, according to the latest statistics.

But the figures contained in the Northern Ireland Composite Economic Index, released on Thursday also suggest there was a slight increase in the rate of growth in the North in 2016.

In the last quarter of the year the index jumped by 2.1 per cent, driven primarily by the services and production sector, while the construction and public sector remained positive but made less of a contribution.

Overall the latest statistics suggest there was strong growth within the North’s private sector over the year – that element of the index recorded average growth of 2.8 per cent for the four quarters, while the public sector (employee jobs) index registered a fall of 2.2 per cent over the same period.

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Jobs growth

One trend identified in the index is the continued evidence of jobs growth in Northern Ireland – backed up by fresh labour-market statistics this week which showed a further drop in the jobless rate to 5.2 per cent for the three months to February.

But while the employment picture may appear outwardly upbeat in the North, business advisers PwC believes the overall health of the economy is about more than just unemployment numbers.

The firm has warned that with inflation likely to accelerate further this year, consumers will feel a further squeeze and any buoyancy in the economy in the second half of 2016 is unlikely to be sustained into 2017.

Ulster Bank has also warned that rising inflation will be one of the key challenges for the North's economy in 2017.