Economic growth in Northern Ireland could slow to under 1.7 per cent next year, according to the latest forecast from PricewaterhouseCoopers.
The continuing global slowdown and the impact of the current military offensive in Afghanistan could lead to a situation where Northern Ireland would be no longer cushioned by its substantial public sector spend, the business consultancy firm has warned.
More than half of the North's current gross domestic product - the value in monetary terms of the economy's output - comes from the public sector. In the past this created a security blanket for the Northern Ireland economy, because no matter how bad things got in the private sector, the public cash cow was always waiting in the wings.
This year, GDP is expected to grow by 2.5 per cent to more than £17.5 billion sterling (€28.08 billion), but it may only grow by 1.7 per cent in 2002. One of the knock-on effects of the terrorist attacks on the US has been the element of uncertainty it has introduced into future planning.
Northern Ireland is not only facing economic uncertainty because of world events, it is also staring at further political uncertainty at home, which Mr Stephen Kingon, managing partner of PWC in Northern Ireland, believes adds up to a slump in business confidence.
"We are revising our economic forecasts for 2002 because there is a big degree of uncertainty, not just about the Northern Ireland situation but the global economy, and the outcome is going to be dictated by the US reaction.
"Northern Ireland has already seen a direct impact in terms of short-term job losses, such as the redundancies at Bombardier, one of the jewels in the Northern Ireland economy. Nobody knows if the military strikes will have a further impact in terms of the global slowdown and what this in turn might mean for Northern Ireland," Mr Kingon said.
In the last two weeks more than 2,092 HR1 redundancy notices have been lodged with the Department of Enterprise, Trade and Investment.
The Minister for the Economy, Sir Reg Empey, has said that the proposed job losses in the North are equivalent to 70,000 jobs in Great Britain. But the issue is how many more may be in the pipeline.
Mr Kingon believes many companies in the North are not optimistic about the outlook for the next 12 months. "I know from my own client companies that people are talking about deferring investment intentions, they are being prudent and they are beginning to batten down the hatches and this is only going to accelerate the downward cycle," Mr Kingon said.
Mr Pat Dyer, a senior official with the GMB trade union in Belfast, said every union was now having to fire-fight Chinese whispers about companies in the North. "There are obvious concerns - we realise that there are many companies who could suffer in Northern Ireland because of the horrific events in America.
"What we are asking companies in the private sector to do is not make knee-jerk reactions to what is going on.
"We want to keep the manufacturing base in Northern Ireland but we do recognise that even before September 11th there was a touch of a recession, so we have to work together," Mr Dyer said.
He believes the Executive has a key role to play in ensuring that jobs are safeguarded. "We need a degree of stability - direct rule is no substitute for getting support from our own locally elected ministers."
According to Mr Nigel Smyth, director of the Confederation of British Industry in Northern Ireland, the Assembly must work to remove the element of political uncertainty in the North.
