The report was carried out by PwC
Northern Ireland’s economy is predicted to grow by just 0.9% next year, a new study has shown. And a revised look at economic growth this year shows an expansion of just 1%, according to the latest Northern Ireland Economic Outlook form PwC.
It also says that while the province is set to receive a £1bn boost following the DUP’s deal to prop up the Conservative Government at Westminster, “it will not fundamentally alter the structural challenges that face any new Executive”.
It says that the absence of a restoration of devolution and an end to political deadlock here, which now looks set to run until the autumn, means that the “strategies and policies essential to regenerate the economy over the medium to long-term remain elusive, with agri-food particularly at risk”.
PwC partner Dr David Armstrong has said that while the additional money will help alleviate some immediate problems, issues like productivity, reform of agri-food and scaling-up the private sector remain unresolved.
“The financial deal brings £200m a year for two years for infrastructure, with the £150m York Street Interchange project specifically mentioned as a priority,” he said.
“The balance of the fund could help complete vital schemes like the A5 or A6 and that would be a welcome boost to infrastructure and connectivity.
“The investment package will alleviate some urgent current pressures, but it is not the silver bullet that will regenerate an under-performing economy.
“Employment has now recovered to more than the pre-financial crisis peak, but virtually all other recovery measures remain below their 2007 level. Rising inflation means real wage growth is now negative, household savings levels are at their lowest since the early 1960s, so medium-term growth prospects are not encouraging.
“The good news is that the local economy will keep on growing, although a combination of decelerating consumer expenditure, lacklustre business investment and Brexit jitters, suggest that growth will slow.”
Northern Ireland’s predicted growth lags well behind the UK as a whole, with predicted expansion of 1.4%.
Speaking about farming and the agri-food sector, the new PwC report says that, assuming no change to the status quo, the Common Agricultural Policy) payments to local farmers will total around €2.5bn (£2.2bn) between 2014 and 2020.