Posted on Monday 4 February 2019 by John Mulgrew
Northern Ireland’s economy grew by 1.5% last year – slightly outpacing the UK as a whole, it’s been claimed.
According to EY, NI economic growth for 2018 is forecast at 1.5% for the full year, while the UK as a whole sits at 1.4%.
But it says growth will slow to just 0.9% this year, and 1.2% in 2020.
“Forecasting on the eve of Brexit is particularly challenging, and although our base case is still for strong growth in the Republic of Ireland and more modest growth in Northern Ireland, the downside risks have increased since our last forecast,” Neil Gibson, chief economist with EY in Ireland says.
“While the risks to the Republic of Ireland’s economy are mostly external, Northern Ireland faces greater internal risks due to less favourable consumer and government conditions. However, whilst the possibility of a very challenging 2019 cannot be dismissed, the good news is that the island faces these challenges from a position of relative strength.
“Modelling a no-deal outcome is challenging given the complexity of how the economy will react. Currencies will adjust, and spending by governments, consumers and businesses will be impacted in ways that recent history tells us are hard to predict.
“Given the modest growth projected for the Northern Ireland economy in the central case, the possibility of a no-deal outcome pushing the economy into recession cannot be discounted. However businesses have shown a remarkable resilience to cope with uncertain conditions over the last two years, and this gives reason to believe that they will again find ways to turn uncertainty and risk into opportunity, and outperform what economic models predict.”
Michael Hall, managing partner, EY Northern Ireland says that while “Brexit dominates the headlines but for many firms the pressure to meet orders and staff their businesses feels even more urgent”.
“Talent remains the number one challenge for firms across the island, but interestingly, improving efficiency is the top opportunity reported. This suggests that firms are increasingly looking at creative ways to tackle costs and this may slow the overall level of job growth across the island.
“We are seeing more innovative solutions to the risks ahead with firms diversifying and looking increasingly closely at what rapidly evolving technology offerings can provide.”