Brexit could push Northern Ireland into recession

Effects of referendum to impact heavily on Northern Ireland economy

Brexit could push Northern Ireland into recession given it's relaince on the UK, an economist has said.

Business activity increased in Northern Ireland in the weeks before the EU referendum.

The Ulster Bank purchasing managers' index said June was the 14th month in a row in which companies recorded an increase in new orders.

The latest report signalled that growth was maintained at the end of the second quarter, with sharper expansions of output, new orders and employment recorded.

However, Ulster Bank chief economist Richard Ramsey said economists have slashed their growth forecasts for the UK economy.

“The consensus opinion is for marginal rates of growth next year, with an increasing number of economists expecting the UK economy to enter recession.

“Given its reliance on Great Britain, Northern Ireland would be very likely to follow suit.”

Following the referendum result, the survey said the business community has entered a new era of uncertainty, he said.

“Given that Northern Ireland shares a land-border with the EU, the referendum result will most likely have even greater economic significance for us. What happens to our Single Market access – both in terms of trade and accessing a pool of skilled and unskilled labour – will be closely watched by our manufacturing, agriculture and hospitality sectors in particular,” said Mr Ramsey.

The rates of growth in output and new orders are still much weaker than those recorded earlier in the year and remain well below the long-term average before 2009.

The majority of survey responses were received prior to the UK referendum result.

All sectors increased their staffing levels in June and retail continues to generate the fastest rate of employment growth.

Manufacturing firms reported a strong rebound in job creation following a sustained period of job losses.

This follows a marked reversal in fortunes for manufacturing output and orders, with the former hitting a 20-month high.