Posted on Wednesday 25 March 2015 by Ulster Business

Economy to bounce back as confidence returns

Danske Bank economist Angela McGowan

Northern Ireland’s economy will grow at the fastest rate since before the financial crisis, according to a new report from Danske Bank.

It said growing household income will lead to a boost to expenditure and increased confidence, both for consumers and for businesses.

“Northern Ireland’s economy continues to perform well on a number of fronts,” economist Angela McGowan said. “In particular the labour market is improving, house prices have recovered, credit is flowing again and real incomes are rising.”

The best performing sectors are expected to be professional and scientific services, ICT, private administration & support services, wholesale & retail and transport & storage which together with account for nearly one third of growth and create 6,000 jobs this year.

Sectors which are expected to shrink are public administration and the education and agriculture.

The latter has been experiencing significant turbulence from lower global commodity prices and the low euro adding to its burden but after falling 0.5% in 2015 it’s expected to return to growth again in 2016.

“With these sectors together accounting for nearly 20 per cent of the local economy, small contractions are nonetheless significant,” Ms McGowan said.

And while the overall pictured is positive, there are a number of drags on economic growth, not least currency.

“There are many tailwinds pushing us in the right direction such as low inflation and rising confidence, but a significant headwind in the form of the strong pound will also place downward pressure on a number of sectors.”

 

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