Northern Ireland’s economy has continued to underperform the Republic’s in key areas like national and household income, but it is growing at a faster pace than the United Kingdom in general, according to a new report.
On Monday, the Economic & Social Research Institute (ESRI) published new research comparing cross-Border economic trends.
The report is the first in a series to examine economic developments and linkages between the two economies conducted by the think tank in conjunction with the Department of the Taoiseach’s so-called shared island unit.
Written by economists Alan Barrett and Adele Bergin, the report notes that both economies were growing up to the end of the second quarter of this year.
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Northern Ireland’s economy grew by 2.8 per cent on an annual basis, while modified domestic demand – a metric that attempts to strip out the distorting effect of multinationals in the Republic – grew by 3.2 per cent over the same period.
“While the rate of growth in Northern Ireland lags that of [the Republic], the rate for Northern Ireland is more than double that of the UK in the same period,” the report’s authors said.
Employment in the North is also growing at a rate “comparable” to that of the Republic, rising by 2.5 per cent and 2.3 per cent respectively in the 12 months to the end of June.
The North’s unemployment rate was also substantially lower than the Republic’s at the end of the second quarter, “although this must be viewed in the context of the lower participation rate in Northern Ireland”, the authors said.
However, the report also highlights the difficulties in comparing the two economies, due to gaps in the data. Data for the North is “generally available with more of a lag” than for the Republic, particularly in relation to demographic indicators, it found.
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The economists said that developing comparable data on an all-island basis “could support more effective labour market planning”.
For example, a greater understanding of how students and workers move between the jurisdictions “could help identify opportunities to better align training provision with demand, facilitate targeted investment in education and employment supports, and promote more co-ordinated workforce development strategies”, it argued.
“Improved cross-Border collaboration on data collection and reporting is a strategic priority for future analysis.”
Commenting on the report’s publication, Mr Barrett said: “It is exciting to be starting this annual series tracking the economies of Ireland and Northern Ireland. Comparative studies across countries are a standard method for generating insights.
“Our goal is to assess over time how the two economies evolve and how policy is influencing those evolutions, always with a view to informing policy.”
Minister for Finance Simon Harris also welcomed the report’s publication.
