NI economy `well placed' to benefit from stability

The economy in Northern Ireland is well-positioned to benefit from sustained political stability despite an emerging "twin-speed economy" which threatens up to 55,000 jobs, according to an economic report published today.

A report by PricewaterhouseCoopers - Northern Ireland Economic Review & Prospects 2000 - argues that a strong overall economic performance last year and business resilience are building blocks to meet future challenges. It highlights positive statistics which show unemployment fell to a record low of 6.6 per cent; manufacturing output increased by 7.7 per cent (5 per cent more than the UK average) and overall growth was more than 2 per cent in 1999.

However, the report notes the emergence of a "twin-speed economy" with strong growth in telecoms, software and IT weighed against continued vulnerability in traditional business sectors.

Some 55,000 jobs are at risk over the next five years and prospects are not good in textiles, clothing and parts of the engineering sector, which remain highly vulnerable, says the report.

To provide the required supply of jobs, estimated at 132,000 over 10 years, job creation levels would have to double between 2000 and 2010 compared to the previous decade.

Sustaining political stability in Northern Ireland is a key prerequisite for this economic growth. Some 40 per cent of firms surveyed last month linked investment intentions to the survival of the assembly, says the report.

The report notes: "We were particularly alarmed at how companies saw the impact of a prolonged suspension - or collapse - of the assembly. In February 2000, close to 90 per cent perceived this scenario as reducing business confidence."

The report warns of an impending crisis in skills availability which is being compounded by an imbalance between educational performance and the future needs of industry and a drain of graduates and skilled workers to the Republic.

It is vital that government addresses the key economic issues and determines the appropriate strategic direction at an early stage if Northern Ireland is to remain competitive, says the report.

The report concludes that the ability to agree and implement short-term strategies and action plans for economic development, education, training and skills enhancement would be key to longer-term success.

A separate report which will be published later today by the Software Industry Federation predicts employment in information computer technologies to grow by 40 per cent over the next two years. However, skills shortages are already affecting 70 per cent of existing firms.