NI economic outlook 'unsettled' warns expert

The North's economic outlook for the next 12 to 18 months is more unsettled than for some time, an expert warned today.

The current political stalemate, impact of impending water charges and higher domestic rates, high energy, insurance and transport costs are all issues which will determine the North's immediate economic future according to First Trust Bank’s latest Economic Outlook and Business Review.

It could be that now is as good as it gets, it was claimed.

The worrying assessment was made for the bank by Michael Smyth, senior lecturer in economics at the University of Ulster.

“The Northern Ireland economy has reached something of a tipping point,” said Mr Smyth.

“Direct rule ministers have reminded us how much the Northern Ireland economy depends upon the public purse and that local taxpayers will bear an increasing burden to support improvements in local services and infrastructure.”

He said that while public expenditure was set to expand over the next 18 months, it was difficult to envisage significant rises in spending thereafter.

“Personal incomes and spending will continue to grow, but will also be hit by the introduction of water charges and higher domestic rates – something business owners in particular will need to bear in mind,” said Mr Smyth.

He said that while Northern Ireland had attracted some external private sector investment, additional investment potential was restricted by the absence of political consensus and the stark reality that the North does not have a competitive investment offering.

Research showed that while Northern Ireland had lower labour costs and commercial property prices, it had higher energy, insurance and transport costs than the rest of the UK.

“In overall terms, Northern Ireland does not have a compelling, competitive offering to foreign investors,” said Mr Smyth.

While general business conditions are likely to improve, the local business community must be more proactive in making local politicians aware of pressing economic issues as the political and economic status quo would no longer suffice, he added.

“If a meaningful package of additional industrial development measures or policies for Northern Ireland is not forthcoming as part of the underpinning of a stable devolved government, then it may well be the cast that, for the economy at least, ‘This is as good as it gets’,” he warned.