By Clodagh RiceBBC News NI business correspondent
April 17, 2023
image source, GettyAndriy Onufriyenko
Positive signs of improvements in Northern Ireland’s economy continued last month, according to a study by Ulster Bank.
The bank conducts a monthly survey of companies in the private sector.
They are asked about things like their headcount, order books and exports, in what is considered a reliable indicator of economic performance.
This was boosted by improved consumer confidence, with only London recording stronger growth than the British regions.
Inflationary pressures continued to ease, both in terms of input costs and output prices, but are still above their long-term pre-pandemic average.
Growth was reported in all sectors of the survey except construction.
Ulster Bank chief economist Richard Ramsey said: “The lack of a Stormont manager and paralysis in decision-making is felt and will continue to be felt in this sector.
“This is reflected in the new orders indicator, which has been showing declines for 21 months in a row.
“While we see remarkable near-term improvements and companies are relatively optimistic for the year ahead, there are many challenges that will impact future growth.”
Cost of living
Mr Ramsey added: “The slowdown in the global economy is one factor, but the outlook for public finances is also bleak and this is compounded by the continued lack of a functioning Stormont manager.
“Meanwhile, households will continue to grapple with a cost-of-living crisis.”
It comes as Danske Bank revised its forecast for the Northern Ireland economy this year, although contraction is still expected.
A report from the bank says that the decline in annual economic output in 2023 is expected to be about 0.3% due to high inflation and changes in the economic policy environment.
image source, Getty Images
Danske Bank has revised its forecast for the Northern Ireland economy this year
Earlier, the bank predicted a 1% decline in activity this year. However, it says the outlook is “very uncertain”.
Business is expected to pick up next year, with the bank forecasting Northern Ireland’s economy to grow at around 0.9% in 2024.
Conor Lambe, Danske Bank’s chief economist, said: “The economy has proved more resilient than previously expected and the labor market remains in a relatively robust position.
“We still expect annual economic output to decline in Northern Ireland and the UK this year, but we have revised our forecasts upwards from our previous report.
“While we believe it has probably peaked, the rate of price increases this year is still expected to remain above the 2% target.
“If inflation continues to be higher than forecast and falls more slowly than expected, it could limit economic activity even further.”
Danke expects the pace of job growth to slow sharply this year.
The bank forecasts that the unemployment rate in Northern Ireland will average around 3.2% in 2023 before rising to an annual average of around 3.5% in 2024.
However, the professional, scientific and technical services and information and communication sectors are expected to experience high job growth of 8.3% and 2.2% respectively.