North still depends on public spending

Despite significant progress, the North's economy still lags behind the UK average in key areas and continues to depend on the public purse, according to Dr Graeme Hutchinson, head of the economics division of Northern Ireland's department of enterprise, trade and investment.

On the positive side, employment growth over the past 10 years at 15.7 per cent was higher than the UK average of 11.2 per cent. Manufacturing output growth for the previous decade was 35.6 per cent, again substantially ahead of the UK average of 3.1 per cent, Dr Hutchinson said.

Since April 2003, more than 11,000 business start-ups had been supported and business survival rates were higher than elsewhere in the UK. However, there was a lack of entrepreneurial culture and a low business start-up rate. "Fear of failure, debt aversion and lack of skills are cited as the main barriers," he said.

In the skills area, the past few years had seen a significant increase in higher education participation. Some 63 per cent of Northern Ireland pupils now achieve five or more GCSE grades, compared with 54.2 per cent in the rest of the UK. But 22.3 per cent of the working age population have no qualifications, higher than the UK average of 13.8 per cent.

"Some 23 per cent of graduates in Northern Ireland report their first destination as outside Northern Ireland," he said.

Public sector employment in Northern Ireland accounts for 30 per cent of total employment and public sector jobs pay substantially higher than private sector jobs.

"The public sector would appear to be the employer of first resort for graduates," said Dr Hutchinson. Just over 30 per cent of public sector workers hold degrees or equivalent compared with just 14.9 per cent of private sector workers.