Northern Ireland is the only part of the UK where the level of business confidence is still falling, a survey claimed today.
Unemployment and a shortage of credit as well as falling public expenditure has hit economic optimism, the study for PricewaterhouseCoopers said.
Pre-election uncertainty and the reaction to dissident republican bombings has left the country lagging behind its other UK counterparts.
PwC chief economist Esmond Birnie said the previously stellar growth of the local housing market caused an unprecedented rise in construction unemployment when the market collapsed.
“In addition, the steady rise in unemployment in services and manufacturing, combined with a credit shortage and falling public expenditure, has hit both investment intentions and business confidence,” he said.
“Add local concern over public spending, pre-election uncertainty and a reaction to recent security events, and it is not surprising that business confidence is lagging the other UK regions.”
Six of the eight UK regions reported business confidence over the past quarter as average and unchanged from the previous quarter. The exceptions were Northern Ireland where confidence fell slightly and London, where business confidence has improved.
Mr Birnie added: “However, while Northern Ireland’s recovery is not as defined as other regions outside London, it is still happening and we expect the local economy to grow by around 1 per cent this year.”
PwC’s Regional Trends Survey collates the results of a poll of PwC’s regional business leaders on the prevailing sentiment among the business community in their regions. It also provides a quarterly outline of UK business health, prospects and concerns.
Unemployment remains high across the UK, with London having the highest unemployment of the eight regions and Northern Ireland the lowest.
However, Northern Ireland also has the highest working age economic inactivity rate of all the UK regions. At 28 per cent, this is significantly above the overall UK inactivity rate of 21.5 per cent.
Despite Northern Ireland’s position at the bottom of the unemployment league table; of the 122,000 new jobs created in the decade to 2008, around a quarter have been lost in the past 24 months as a result of the downturn.
PwC estimates the recession has cost Northern Ireland around 33,000 jobs, thus far, but as the totals exclude the self-employed the damage is probably far worse.
PA