The State of Britain

NI

£163m of new growth deal funding used as an incentive to recall Stormont, and Wrightbus, Bombardier Belfast and Harland and Wolff are all bought

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Unemployment in NI decreased by 2,000 to 26,000 between June and August, the fall of 0.2% left the overall rate at a record low of 2.9%.

The South West of England continued to record the lowest rate at 2.4% with the UK rate at 3.9%. The highest rate was 5.8% which was recorded in the North East of England.

The South West also had the highest employment rate at 81.0% which compared with 71.5% in NI. UK employment was estimated at 75.9%.

NI average property prices increased by 0.8% to £168,221 in Q2, which took annual growth to 3.5%. In comparison, UK prices grew by 0.8% to £234,853 during August, an annual growth rate of 1.3%.

The ONS’s Personal Well-being (or Happiness) Index has ranked NI eleventh out of the 12 UK ‘regions’ in terms of improved happiness since the last survey. Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.

Development

In July, Boris Johnson Announced that £300m growth deals funding will be shared across Scotland, Wales and Northern Ireland.  NI Secretary Julian Smith has now said Northern Ireland is to benefit from £163m of this investment.

This money will only be available though if Stormont is operational.

Growth deals (also known as city deals in urban areas) are national, devolved and local government funding packages aimed at boosting regional economies, often by encouraging private investment in specific projects.

Belfast City Deal, which proposes to invest £350m into Belfast and six surrounding council areas, has already been agreed. In May, c £100m has been committed to boost the economy in the Derry and Strabane District Council area.

The new £163m will cover mid south west Northern Ireland and Causeway Coast & Glen. Council areas that will benefit include: Armagh City, Banbridge and Craigavon Borough Council; Fermanagh and Omagh District Council and Mid Ulster District Council.

Canada’s Bombardier has agreed to sell part of its business to, Kansas based, Spirit AeroSystems for more than £1bn in cash and debt. The deal includes the Belfast plant and facilities in Morocco and Dallas.

Spirit, is a major supplier to Airbus and Boeing. The wings for the Airbus A220 are made at the Belfast plant and it also supplies other Airbus parts.

The Belfast factory will continue to supply Bombardier’s business jet division. Bombardier employs about 3,600 people in Northern Ireland.

A vote of confidence in Londonderry from Manchester-based David Samuel Properties which has paid a reported £30m for The Crescent Link Retail Park.

This is the second biggest property deal in Northern Ireland this year after Citigroup bought its main Belfast premises from Titanic Quarter for £34m.

Jobs

A deal in principle has been reached for the sale of Wrightbus.

Purchaser, Jo Bamford, son of JCB owner Lord Bamford, said agreement had been reached for the acquisition of the Wrightbus factory after an issue over adjacent farmland was resolved.

It now appears that the farmland will be gifted to the local council which could use it as an innovation project as part of the Belfast city deal in conjunction with Queens’ University.

Known for building the ‘Boris Bus,’ c1,200 Wrightbus workers were made redundant after the company entered administration. It is not known whether Invest NI has committed any public money to the latest deal.

The Agency disclosed it loaned the Wrightbus group £2.5m in June 2019 to keep the business afloat. The development agency will need to ensure that these funds are not classified as operating aid under state aid rules.

Also on the buses, Mallaghan Engineering in Dungannon.is creating 60 jobs after securing a multi-million-pound contract to build a fleet of airport buses.

Ryanair has initially ordered a 32-strong fleet of the Mallaghan 50W airport bus, to be delivered in the next 12 months.

Belfast’s Harland and Wolff shipyard, best known for building the Titanic, has been bought for £6m by the London-based energy firm, InfraStrata.

The yard employed 120 before it went into administration in August and InfraStrata has said it will retain the 79 workers who are still employed there. The new owners will initially focus on metal fabrication for its energy projects one of which is a potential gas storage project at Islandmagee in County Antrim.

The yard is synonymous with the interventionist policies of the 1970s and is estimated to have soaked up over £1bn of taxpayers’ money.

American software firm, ESO, which is based in Texas, is to create 120 jobs highly paid in Belfast.

The company sells software tools and products to emergency services and hospitals in north America and is planning to establish an engineering centre in Belfast.

The new posts will be in software, engineering, HR, and operations. Invest NI has offered ESO £780,000 towards the inward investment win.

Finally, consultancy firm EY is creating 94 new jobs at its Belfast office to add to the 520 already employed in the city. The firm is recruiting technology specialists, robotics, AI engineers and data scientists as well more traditional audit and tax roles.

Northern Ireland carving out a niche in cyber security, the end of the road for Wrightbus and a ‘Boris Bridge’ to Galloway

Reading Time: 4 minutesIn his latest spending round (covering the next year), Chancellor, Sajid Javid, announced £13.8bn of extra revenue spending for public services across the UK. Under the Barnett formula, Northern Ireland’s share will amount to c£400m, a real increase of c2% according to the Northern Ireland Office. With no Stormont government, however, spending decisions regarding this new money will be made largely by civil servants.

The design and build of a new generation of Royal Navy frigates has been won by engineering firm Babcock. The £1.25bn contract for the five Type 31 ‘Lidl’ warships secures hundreds of jobs at yards across the UK. At £250m the Type 31 is a smaller, cheaper frigate than the Type 26 warships currently being built on the Clyde which are c£1bn each. The winning consortium also includes Harland and Wolff. The ships will be assembled in Rosyth, with construction work expected to be spread between the other UK yards like Belfast. Work is to begin by the end of 2019, with the first ships delivered in 2023.

Channel 4 News has seen documents showing that the Treasury and Department for Transport have been asked for advice on the possible costs and risks of a bridge from Northern Ireland to Scotland. Better infrastructure in Galloway suggests a bridge from Larne to Portpatrick is preferable to the shorter Antrim coast to Campbeltown crossing. At 20 miles long though, the Galloway option would cost much more, c£15-£20bn, but the region does have an existing trunk roads network from the Cairnryan ports to the motorway network. Another complication is the Beaufort’s Dyke, a deep trench where millions of tonnes of ordnance has been jettisoned. Where or who will foot the bill for this project is unclear. Last month, Transport Secretary, Grant Shapps, put the £80bn HS2 project under review.

Jobs
A US cyber security firm, Contrast Security, is creating up to 120 jobs at a new Belfast office. The Californian company is establishing a development and delivery centre aided by a grant of £786,500 from Invest NI. The new jobs should offer an average salary of more than £30,000, reflecting the impact the cyber-security sector is having in NI where 1,700 professionals are now employed in the industry.

Another cyber security firm, MetaCompliance, is creating 70 jobs in Londonderry. The firm develops software that companies use to minimise risk from cyber attacks. Invest Northern Ireland has offered £695,000 towards the new roles and the £4.5m investment.

US engineering company, Terex Corporation, has opened a new factory near Londonderry, creating 100 jobs over the next four years. The new facility in Campsie is part of a £12m investment by Terex. The firm currently employs 1,500 people across eight sites in Northern Ireland. The factory will manufacture equipment used in waste management, mobile conveying and recycling at the new site.

The last UK-owned bus manufacturer Ballymena based, Wrightbus, has entered administration with the loss of 1200 jobs. Deloitte, the firm’s administrator, has been unable to find a buyer for the business and so just 50 jobs will be retained. Deloitte said the switch from diesel to electric buses caused a sharp decline in demand in the UK resulting in the firm’s cash flow problems. Invest NI has disclosed it loaned the Wrightbus group £2.5m in June 2019 to keep the business afloat. The development agency will need to ensure that these funds are not classified as operating aid under state aid rules.

Antrim-based contractor, Blackbourne, has ceased trading with the loss of c90 jobs. The company worked in mechanical/electrical engineering and contract maintenance. And in west Belfast, Caterpillar financial services is outsourcing its global finance operations to Accenture. Accenture does not have a finance operations in Northern Ireland so 100 jobs are at threat.

The Stats
For the first time, the ONS has published quarterly GDP for all nine English regions plus Wales. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013. The Northern Ireland figures are compiled by the Northern Ireland Statistics and Research Agency. The latest available comparable figure, which are for the year ended 2018, showed Northern Ireland’s economy grew by 1.8%. This ranked the ‘region’ fifth of the twelve UK ‘regions.’ The East Midlands topped the table with growth of 3.4% whilst at the bottom the South West economy declined by 1.1%. UK growth over the same period was 1.5%. The quarter to Dec 2018 showed GDP was driven by a 0.5% increase in services but this was partially offset by decreases in production of 0.1% and construction of 0.3%. More recent estimates (six months later) for the year ended June 2019, published by ESCoE last month, ranked Northern Ireland bottom with growth of 1.0%, which suggests the Province’s economy has weakenend this year relative to other parts of the UK.

Unemployment in Northern Ireland decreased by 2,000 to 25,000 between May and July, the drop of 0.3%, took the overall rate to 2.8%, a record low. The South West had the lowest rate at 2.4% with the UK rate at 3.8%. The highest rate was 5.0% which was recorded in the North East. The South West also had the highest employment rate at 80.8% which compared with 72.0% in Northern Ireland . UK employment was estimated at 76.1%.

Northern Ireland’s average property price was £136.767 in June, which meant annually prices had risen by 3.5%. In comparison, UK prices grew by 0.5% to £232,710 during July, an annual growth rate of 0.7%.

Economic growth in Northern Ireland is the lowest in the UK but labour, earnings and house price data more encouraging, optimism at Harland and Wolff

Reading Time: 4 minutesGrowth in Northern Ireland was 1.0% in the year to June 2019, which ranked the country bottom in the UK according to estimates from ESCoE. The previous quarter’s growth was also around 1.0% which suggests the Northern Ireland economy is stalling at best. Of the twelve ‘regions’ of the UK, London had the best performance nationally at 2.3%; the national growth rate for the same period was 1.5%. With the UK economy contracting by 0.2% in the quarter, stalling growth in Northern Ireland suggests it is possible that over the quarter, the Province has outperformed other regional economies which have shrunk.

Unemployment in Northern Ireland increased by 2,000 to 28,000 between April and June, an uplift of 0.2% to 3.1%. The South West had the lowest unemployment rate at 2.7%, the North East had the highest at 5.3%, with the UK rate at 3.9%. The South West also had the highest employment rate at 80.5%, which compared with 72.2% in Northern Ireland; the UK rate at 76.1% is the joint highest since comparative records began in 1971.

In June, Northern Ireland’s average earnings increased from £513 to £545 per week. London had the highest average earnings of £831; the North East had the lowest at £537. In the UK average earnings grew by 3.7% or by 1.8% after inflation.

Northern Ireland’s average property price increased during the month, the 0.8% rise to £136,767 meant annually prices increased by 3.5%, the second best price growth in the UK. In comparison, UK prices grew by 0.7% to £230,292 during June, which left the annual growth rate unchanged at 0.9%.

Some interesting analysis by Northern Ireland’s Department for the Economy has suggested cutting air passenger duty (APD) would not deliver value for money. APD does not apply on long haul flights from NI but the DUP and airports have lobbied for it to be abolished altogether or at least cut on short haul. Civil servants and their consultants acknowledged that cutting the tax could help develop new air routes, but Northern Ireland’s block grant would be cut to reflect the reduced revenue going to the Treasury. An implicit subsidy to already commercially viable routes might also raise state aid problems. The report also recommended that the zero APD rate on long haul flights – initially aimed at supporting a direct service between Belfast and New York – be retained as an inducement to airlines, after United Airlines and Norwegian withdrew the only services on that route. Scotland and Wales use co-operative marketing arrangements – provided to Northern Ireland’s airports through Tourism Ireland – to attract long-haul services. The report suggests more investment in co-operative marketing via economic development and tourism agencies, airlines and airports jointly to promote and market new routes. Across the water, the Scottish Government has recently declined to abolish APD on environmental grounds, although Inverness airport remains exempt.

Net migration to Northern Ireland increased for the fifth year in a row and reached its highest level in 10 years last year according to the NI Statistics and Research Agency. The number of people coming to live in Northern Ireland was 23,000, while 19,000 people left, resulting in a net gain of 4,000. Belfast had the highest level of net international inward migration.

On jobs, Connex Offsite is to create 140 jobs over the next five years. The firm manufactures modular bathrooms which are installed in commercial developments like hotels and student accommodation. Also Chargifi, a provider of cloud-connected wireless charging technology, is to set up a hub in Belfast. The £3.6m investment will create 41 jobs. And Newry-based sandwich company Around Noon is creating 94 jobs in a £7m investment. The last two projects are being supported by c£1m of public funding via Invest NI. At Harland and Wolff, administrators say they have received a number of non-binding offers to buy the business as a going concern. The Belfast yard – which built the Titanic – employs c120 and was placed into administration earlier in the month.

A report by an All-Party Parliamentary Group (‘APPG’) of MPs which looks at Post-Brexit Funding for the nations and regions has found that the UK would receive additional EU funding in the 2021-27 spending round. Three additional sub-regions are likely to slip below the threshold of 75% EU average GDP per head that would qualify them for ‘less developed region’ status, but no part of Northern Ireland has yet fallen below this level.

Additionally, the EU has proposed that ‘transition region’ status should be extended to cover all regions with a GDP per head between 75 and 100 per cent of the EU average. Northern Ireland is classified as a transition region under the current 75-90 per cent rule. Seven additional sub-regions are likely to slip below the threshold of 100% EU average GDP per head, qualifying them for ‘transition region’ status. They are East Anglia, East Wales, Greater Manchester, Leicestershire, Rutland & Northamptonshire, Outer London South, North Yorkshire and South Western Scotland. It is not clear how much extra funding these areas would have received from the EU, but €50 per head over the next EU spending round would equate to c£560m.

The UK government has promised to replace EU funding to the regions with a new UK Shared Prosperity Fund. If the new sub regions are added, the APPG calculates this amounts to c£1.8bn pa, on top of the c£2.2bn pa already committed as part of Local Growth Funds (in England). Integrating the Local Growth Fund into the UK Shared Prosperity Fund could be problematic. The Local Growth Fund allocates funding to LEPs via competitive bidding whereas the allocation of EU funds uses a fixed formula. How the Shared Prosperity Fund will be allocated to Northern Ireland and the other devolved nations and mesh with other pots like the City Deals is yet to be determined.

Concerns over an iconic Northern Ireland firm and more growth deals announced

Reading Time: 3 minutesUnemployment in Northern Ireland increased by 1,000 to 28,000 between March and May, the uplift of 0.1% took the rate to 3.1%. At 2.6% the South West of England had the lowest rate and at 5.6% the North East had the highest rate in the country. The UK unemployment rate stands at 3.8%.

Northern Irish average property prices decreased by 1.0% to £134,811 during the first quarter which reduced the annual growth rate to 3.5%. In comparison, UK prices increased by 0.1% to £229,431 during May which reduced the annual growth rate to 1.2%.

On interventions, the new prime minister has announced six new growth deals, three in Scotland, two in Northern Ireland and one in Wales. The UK government said the allocation of the £300m pot would depend on the strength of the proposals put forward.

Growth deals (also known as city deals in urban areas) are national, devolved and local government funding packages aimed at boosting regional economies often by encouraging private investment on specific projects. Belfast City Deal, which proposes to invest £350m into Belfast and six surrounding council areas, has already been agreed. These new funds will cover mid south west Northern Ireland and Causeway Coast & Glen. They will also be used to complete a deal for Londonderry and the North West.

Devolved funding needs to be more transparent according to a report from the powerful Public Accounts Committee of the House of Commons (‘PAC’). Last year spending per head in Northern Ireland was highest at £11,190 per head, followed by Scotland at £10,881 per head and Wales at £10,307 per head with England was lowest at £9,080 per head. The Treasury allocates a block grant to each region and then uses the Barnett formula to flex the funding when there are changes to UK government spending that affect devolved services, aiming to give each country the same pounds-per-person change. On top of this the government can allocate additional funding outside Barnett for example on City Deals. The PAC claims that few taxpayers understand how the system works. The Committee also said the uncertainty caused by postponing the Spending Review was impacting on how the government will replace existing EU funding.

The iconic Harland and Wolff shipyard in Belfast – where the Titanic was built – is at imminent risk of closure according to unions who have called for it to be nationalised. A government spokesperson said the firm’s difficulties were a commercial issue and that it had no plans to intervene. The company’s Norwegian parent company, Dolphin Drilling, which has owned the yard since 1989, is having serious financial problems which led to it putting Harland and Wolff up for sale late last year. There were exclusive negotiations with a potential buyer but they appear to have ended in the last two weeks. The yard employs about 130 people, specialising in energy and marine engineering projects.

Also, in Ballymena, bus manufacturer Wrightbus has confirmed it is seeking an investor as it faces cashflow problems. The company has hired accountants Deloitte to find potential investors. The firm had two rounds of redundancies last year with 95 jobs going in February and June, it continues to employ about 1,400 staff in Northern Ireland. Demand for new buses in the UK market has dropped off following years of growth driven by new emissions targets.

Better news in East Belfast after Air France said it would buy 60 Airbus A220s, the wings of which are made in Northern Ireland. The airline has also taken an option which could see its order rise to 120. About 1,000 staff work at the A220 wing factory. The A220 was formerly the Bombardier C Series until Airbus bought a majority share in the project in 2017. Airbus said there is now an order book for 551 A220s.

Also on jobs, Lisburn-based firm, Creative Composites Ltd, is creating 132 jobs as part of an £11m expansion. The new jobs include production, engineering and managerial positions and are supported with £1.5m from Invest NI. The firm manufactures products for the car, rail and medical sectors. An expansion by Ballymoney-based construction firm Dowds Group is also being supported with an Invest NI employment grant of £442,000 which is tied to 68 new jobs. However, in Armagh, Linwoods is closing its Armagh bakery with the loss of 70 jobs.

Employment at a record high, Northern Ireland’s tourism strategy on track and the Derry City deal gathers momentum

Reading Time: 4 minutesUnemployment in Northern Ireland decreased by 3,000 to 28,000 between February and April, the drop of 0.4% to 3.1% was the joint best in the UK. The South West had the lowest rate in the UK at 2.7%; at 5.7% the North East had the highest. The UK unemployment rate stands at 3.8%.

The numbers employed grew by 2% to reach a new record high of 778,240. The private sector added more than 13,000 jobs over the year, an increase of 2.4% to 569,460 and in the public sector growth was 1% or to 208,480.

According to the latest figures from the ONS, Northern Ireland had the second lowest disposable household income in the UK between 2016 and 2017. The UK average is £19,514 per household with only England higher than this at £19,988; Scots had £18,099 of income whilst the Northern Irish narrowly beat the Welsh with £15,813 versus £15,754. Nottingham had the UK’s lowest gross disposable household income (wages or benefits) of £12,445 with London borough Kensington and Chelsea recording household income over £60,000 and a growth rate of 4.9% from the previous year. With inflation over the period at 2.6% the growth in Northern Ireland incomes of 1.0% suggests a decrease in disposable income in real terms.

The chair of the Industrial Strategy Council, Bank of England chief economist Andy Haldane, has said Northern Ireland needs to invest more in higher education as the Province’s universities are full which means productivity growth is being impeded. Northern Ireland’s productivity is consistently c15% below the UK average with the lowest proportion of the UK population with qualifications equivalent to A-Level or above. The Industrial Strategy Council is an independent body tasked with monitoring the government’s progress on the commitments made in its modern Industrial Strategy. The Industrial Strategy allows different regions of the UK to focus on their strengths but the lack of a Stormont government puts Northern Ireland at a disadvantage.

Tourism in Northern Ireland is a bright spot and is on track to meet the £1bn target by 2020 set by the last Stormont government. Estimated spending in 2018 was £968m across 5m overnight trips with The Giant’s Causeway, Titanic Belfast and the Ulster Museum the three most popular visitor attractions in 2018. Also a total of 128 cruise ships docked at ports in 2018, more than double the number in 2013. Spending by external tourists was estimated to be up 28% compared to 2013 which brought in £669m to Northern Ireland. New air routes, the relative weakness of sterling and the Game of Thrones effect meant 16% of visitors were foreign (non-UK and the Republic of Ireland).

On jobs, Japanese firm Mitsubishi Heavy Industries has agreed to buy Bombardier’s CRJ aircraft programme for £432m. Bombardier put its Northern Ireland operations up for sale last month. The fuselages of the CRJ planes are made at Bombardier’s Belfast plant employing c300 people.

Software firm Dynamic Signal is to create 100 jobs in Belfast. The company makes technology that enhances intra firm communications. Invest NI has tied in £650,000 towards creating the jobs and since the US firm only has seven staff in Belfast this almost qualifies as inward investment.

Another good win is technology company Futrli, which is creating 80 jobs in Belfast. The company uses artificial intelligence technology to manage data for small businesses and accountancy firms. Invest NI has offered £440,000 plus the Department for the Economy will provide £406,000 for training with Futrli investing £5.5m. The Brighton-based company has offices in Auckland, Sydney and Melbourne.

Visitors to Scottish distilleries may be soaring, but a project to open the first whiskey distillery in Derry – The Quiet Man at Ebrington – for nearly 200 years will not go ahead. The project stalled last year and now looks over after the company seeking to revive it notified the council. Work on a museum marking the city’s maritime history has also stalled with the lack of a Stormont government cited as a reason why. The museum will cost more than £11m of which c£4.5m has been committed by the council with a further £6.5m from Tourism NI, the NI Executive Office, and the Department for Communities pledged.

The distillery and museum are examples of why the redevelopment of the former 26-acre site military base at Ebrington is proceeding slowly, with just five of the 21 buildings occupied. The base closed in 2003 and was gifted to Derry by the MOD. The Peace Bridge opened in 2011 allowing people to walk from the city centre to the Waterside but the urban regeneration company tasked with the redevelopment closed in 2016, with the loss of 18 jobs. Plans are still in place for a hotel, office spaces, a restaurant and a café.

It is likely that some of the £105m of government funding announced last month in The Derry and Strabane City Deal could find its way to Ebrington. The city will receive £50m to support innovation and grow the area’s digital sector with a further £55m allocated to an Inclusive Future Fund aimed at tackling deprivation and developing young people’s skills. Derry City and Strabane District Council anticipates the total investment will be £300m if it is complemented by the Northern Ireland government and the private sector. The City Deal plans include the establishment of a riverfront university medical education and innovation hub which would create 200 new research posts and increase Ulster University numbers in the city by 2,000. City of Derry Airport is outlined in the deal as are proposals that include improvements to the region’s digital connectivity, the creation of skills academies and the creation of a Centre for Industrial Digitisation, Robotics and Automation.

Disappointing growth in Northern Ireland but a significant drop in unemployment, the need to restore Stormont government intensifies and economic benefits flowing from Game of Thrones are no fantasy

Reading Time: 4 minutesGrowth in Northern Ireland fell by 0.2% to 0.7% in the year to March 2019 according to estimates from ESCoE. This was the lowest growth rate in the country; at 2.7% London had the highest. The East of England was the most improved region of the UK with growth accelerating from 0.9% to 1.9%. The UK growth rate for the same period was 1.5%.

More positively, unemployment in Northern Ireland fell by 8,000 to 26,000 between January and March; the drop of 0.9% to 2.9% was the best in the UK. At 2.4% and 5.4% the SW of England and the North East had the lowest and highest unemployment rates in the country. The UK unemployment rate stands at 3.8%.

In March, average earnings in Northern Ireland fell to £513 per week the lowest in the UK, London had the highest average earnings of £762. In the UK average earnings grew by 3.3% or by 1.5% after inflation.

Northern Ireland average property prices fell by 1.0% to £134,811 during the month which meant annually prices grew by 3.5%. In comparison UK prices dropped by 0.2% to £226,798 during March which cut the annual growth rate to 1.4% although transactions were up by 1.4%.

In its estimate of regional public spending and regional tax revenues in 2018, the ONS has concluded that Northern Ireland had a deficit of £9.2bn. This compares with London which had the highest surplus of £34.3bn. On a per person basis Northern Ireland had the biggest deficit at £4,939 whereas London had the highest surplus of £3,905. The only areas of the UK to run surpluses were London, the South East and the East of England. At a national level, the UK had a deficit of £636 per person which split into deficits of £106, £2,452, £4,395 and £4,939 for England, Scotland, Wales and Northern Ireland.

To add to the disappointing growth figures, research from Ulster Bank suggested April saw a contraction in new orders, exports, employment and overall output in NI’s sharpest fall in business activity since the end of 2012. Manufacturing was the only sector to record an expansion in output. This compares with an improvement in business conditions across most of the UK regions. Added to this, the data for retail sales was the worst in almost seven years.

Further economic worries came with the announcement that aerospace firm, Bombardier, was putting its Northern Ireland business up for sale as part of a global reorganisation. Bombardier has operations in Belfast, Newtownabbey, Newtownards and Dunmurry that employs c3,600 staff directly with another c12,000 in the supply chain. In November 2018, the company said it would cut 490 jobs in Belfast but this has been suspended. Wings for Bombardier’s A220 planes are made at the Belfast plant where a £520m facility was opened in 2013. Bombardier and its predecessor Shorts, have been major employers in Northern Ireland for decades. In 2017, it was estimated that the wages of the company’s employees put £158m into the local economy annually. Potential purchasers could be firms like Spirit, Aerosystems or GKN.

In County Antrim, building firm, Dixons Contractors, has been placed into administration. The company, which was set up in 1979, employs about 90 people. And in Londonderry, shirt maker Smyth & Gibson is to close its factory with the loss of 34 jobs although 20 staff have already found new jobs with O’Neills (the sportswear manufacturer.) There were once more than 40 shirt factories in Derry which still employed hundreds in clothing manufacturing up to the early 2000s but since then the industry has been decimated by global competition.

More positively, Scottish venture capital firm, Par Equity, has taken a £2m stake in Plotbox. Plotbox, based in Ballymena, County Antrim, makes cemetery management software. And Dale Farm, has won a contract to supply cheese to the Greggs bakery chain. Dale Farm is one of Northern Ireland’s largest food businesses.

On development, Japanese firm, Nippon Gases, is to build a £9.5m carbon dioxide import terminal at Warrenpoint Port which will store liquid CO2 for industry across the island of Ireland. The gas is widely used in the food and drink industry, mainly for refrigeration.

A consortium has been appointed to redevelop part of the seafront in Bangor, County Down. The scheme includes a hotel, cinema and other commercial space as well as enhanced public spaces. The decades old project was effectively nationalised after the financial crash with the Department for Social Development buying it from the developers. The Department appointed a developer in 2017 but it did not proceed and the appointment process had to be rerun.

Also on interventions, film agency NI Screen’s c£16m investment in production funding for Game of Thrones seems good value for money. With the final episode now aired, the show is estimated to have brought £251m into the economy since production began in 2010. Figures from Tourism NI suggest that 350,000 fans visit Northern Ireland every year as a result of Game of Thrones and spend £50m.

NI’s economy risks falling further behind other UK regions if devolved government is not restored according to the CBI. Unlike the West Midlands for example, which has recently published an industrial strategy, there can be no plan for NI without a Stormont minister in place. Civil servants have been running public services but must be guided by decisions made by the executive before it collapsed. An industrial strategy was published in draft form in 2017, but a final version needs to be approved by the executive. Likewise a new tourism strategy needs to be approved by ministers.

Civil servants have announced a major review of the business rates system in Northern Ireland. The first stage of the review will begin in July, and involve analysis of urban regeneration, taxation and retailing, assessing the changes that have taken place in town and city centres. The rating system is a devolved matter, and a Stormont minister will also need to be in place to implement any recommendations.

Northern Ireland’s unemployment at a record low, NI’s house prices increase the most in the UK and inducements attract sustainable inward investment

Reading Time: 4 minutesUnemployment in NI decreased by 4,000 to 26,000 between December and February; a significant fall of 0.5% to 3.0% – the biggest drop in the UK. The SW of England had the lowest unemployment rate in the country at 2.6% and the NE of England had the highest at 5.6%. The national unemployment rate stands at 3.9% and UK average earnings grew by 3.5% or by 1.6% after inflation. NI’s rate is a new record low and the UK rate is now lower than at any time since the end of 1975. The EU rate is 6.5% and the rate in the Republic of Ireland is 5.3%.

It is hoped NI’s record low unemployment rate will be maintained after the national living wage increase – to £8.21 an hour for workers over the age of 25 – has fed through to the 75,000 NI workers who will receive £690 more in their annual pay packets. The national minimum wage is also rising – to £7.70 an hour for 21 to 24 year olds and £6.15 an hour for 18 to 20 year olds.

NI’s average property prices increased by 1.3% to £136,669 during the month which meant prices improved by 5.5% over the year – the biggest uplift in the UK. In comparison, UK prices dropped by 0.8% to £226,234 during April which cut the annual growth rate to 0.6%.

Despite the positive economic data, there are some clouds on the horizon. Research from Ulster Bank suggests Northern Ireland’s private sector saw its first monthly fall in output in almost three years in March. Due to Brexit stockpiling, manufacturing was the only sector to see output growth with data suggesting export orders and employment levels have dropped at their fastest rate in almost six years.

The gloom was evidenced by poultry firm, Moy Park, which is to temporarily halt some production at its factory in Ballymena, County Antrim. It will stop slaughtering birds at the factory until January next year and its north Antrim hatchery will also be out of operation until November this year. Processing and packing operations will continue at the Ballymena plant. The firm is owned by US-based Pilgrim’s Pride and is one of NI’s largest private sector employers; c1,700 people work at the Ballymena plant and c3,500 at other NI operations. Unite are concerned this could lead to 400 job losses, but Moy Park maintains that redundancies can be avoided through redeployment elsewhere.

At Bombardier, Unite says that up to 35 of the 490 job losses announced last November will be compulsory redundancies. A consultative ballot on strike action has been agreed by Unite and GMB union representatives. Bombardier employs c4,000 people in plane-making activities at a number of sites in and around Belfast.

More positively, Seagate, is investing £47m in a R&D project at its Londonderry factory, creating 25 highly skilled jobs. The project will focus on nanophotonics – the generation and manipulation of tiny points of light and is supported with a grant of c£10m from Invest NI. Supporters of governments that pursue robust regional policies will point to the benefits of attracting key inward investment – via financial inducements – that bring long term benefits to the more economically challenged parts of the UK. Seagate was an inward investment project in 1994, investing £50m and creating 500 new jobs. The firm now employs 1,400 people and is estimated to have invested in excess of £1bn at a cost to the public purse of £175m.

Indian-owned Firstsource Solutions, has announced a £1m investment into its Belfast city centre hub. The new 600-seat call centre will house 150 existing staff and has the capacity for 450 new jobs, expanding on the firm’s existing 1800 headcount. Firstsource is one of the UK’s top 10 contact centre providers and works across the Banking, Financial Services & Insurance, Telecommunications & Media, Utilities and Healthcare sectors with clients like Sky UK & ROI, Now TV, GiffGaff, Royal Bank of Scotland and Ulster Bank. The firm cited the recently announced £350m Belfast City Deal as one of the reasons why it chose to invest in the city.

More votes of confidence in Belfast came this month. First, Citigroup, has bought its premises from Titanic Quarter. The financial services firm has rented the Gateway building since 2009 and although the price has not been disclosed the building had been on the market for £34m. The US firm is one of Belfast’s major employers with about 2,600 staff in the city. Second, developer JMK Group is proposing a 280-room hotel at a site on Hamilton Dock, next to the Titanic Belfast visitor attraction. Third, the parent company of the Belfast Telegraph is being sold to Mediahuis, a Belgian media group, for £126m. Mediahuis’s continental titles include De Standaard in Belgium and De Telegraaf in the Netherlands. Also in the city, all of the businesses forced to close because of the Primark fire will reopen by mid June. The fire, in August 2018, destroyed Bank Buildings, which housed Primark and meant that 14 businesses near the Bank Buildings were not able to trade.

Finally in Antrim, plans for a new £30m distillery in Bushmills have been approved by Causeway Coast and Glens Borough Council. The new facility will include a malt intake, mill, lauter tun, washbacks, still house, tank farm and evaporator and will eventually have an annual malt distilling capacity of 7m litres of alcohol; up to 20 jobs are likely to be created. In 2014, the whiskey brand was bought by Mexican-headquartered firm Jose Cuervo. Bushmills Distillery claims to be the oldest licensed distillery in the world.

NI’s property prices increase the fastest in the UK, the Belfast City Deal moves forward and civil servants continue to act as Ministers

Reading Time: 3 minutesUnemployment in Northern Ireland was unchanged at 31,000 or 3.5% between November and January. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in the Northern Ireland increased to £545 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

Northern Ireland’s average property price increased by 1.3% to £136,669 at December 2018, giving an annual growth rate of 5.5% – the highest in the UK. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%.

The NI secretary has approved the heads of terms of the Belfast City Deal; the first City deal in Northern Ireland. The UK Government will invest £350m in the Belfast region over the next 15 years if the funds are matched by the Northern Ireland Executive – assuming devolved government is restored. Co-investment of c£150m from Belfast Region City Deal partners and investment by the private sector could bring in over £1bn. The deal could initiate more than 20 projects, create up to 20,000 new jobs and increase productivity levels. Belfast City Council lobbied for the deal in partnership with six other councils: Antrim and Newtownabbey; Ards and North Down; Lisburn and Castlereagh; Mid and East Antrim; and Newry, Mourne and Down. Projects under consideration include a Global Innovation Institute, investment in digital connectivity, new tourist attractions including a new landmark venue in Belfast; development of facilities at Hillsborough and Carrickfergus castles; an extension of the Gobbins coastal path and the regeneration of Bangor seafront amongst others. On transport, an extension of Belfast’s Rapid Transit System will take in outlying districts. There are already more than 30 City Deals across Britain and work on a Derry-Londonderry Region City Deal is also underway.

Whilst City Deals will create employment, research from the Ulster University Economic Policy Centre suggests the National Living Wage could lead to 700 job losses. These job losses and other costs to businesses are estimated at £153m outweighing economic benefits of £80m through additional earnings and improved productivity. The National Living Wage was initially set at £7.20 rising to about £8.60 by 2020; this will lead to a pay increase for more than 128,000 employees with workers in the hospitality sector being the major beneficiaries followed by retailing and administration.

In its monthly survey of private sector activity, Ulster Bank suggests that Northern Ireland firms saw their export orders drop at the sharpest rate in more than five years with firms also reducing headcount for the second month running. The dominant services sector continued to expand; manufacturing was flat and construction and retail contracted. The wider economic slowdown in the Eurozone and beyond plus. Brexit-related worries are clearly a drag on growth. Brexit uncertainty was highlighted by Intertrade Ireland – the cross-border trade promotion body – that reported a late surge in applications for its Brexit planning vouchers.

On development projects, civil servants – in the absence of Stormont ministers – have approved plans for a £300m gas-fired power station in Belfast. The new power station will be based in the city’s Harbour Estate and will provide energy for about 500,000 homes and businesses. Significant planning decisions will continue to be made by officials for the foreseeable future.

A £12m investment in Londonderry by US global engineering firm Terex will create 100 jobs. The jobs will be a mix of production operatives, management roles and research & development positions. The project will manufacture equipment used in waste management, mobile conveying and recycling at a new 105,000 sq ft facility at Campsie. Invest NI has offered Terex c£1m of support for the project. Invest NI has also offered artisan food manufacturer Finnebrogue c£1.3m as an aid to capital investment and up to 125 new jobs; the firm will spend £17m on its nitrite-free bacon facility in Downpatrick.

Northern Ireland agri-food business Fane Valley has acquired the Irish firm Silver Hill Foods which produces premium ducks, largely for export markets in the UK, the EU and Asia. County Monaghan-based Silver Hill’s focus on non-UK markets helps Fane diversify its geographical customer base. Dublin based Davy Real Estate has bought iconic Harvey’s Point hotel in County Donegal for an undisclosed sum. The hotel, on the shores of Lough Eske, has been owned by hoteliers Deirdre McGlone and Marc Gysling since it opened in 1989.

WDR & RT Taggart – founded in 1902 – one of Northern Ireland’s oldest businesses has gone into administration. The engineering and consulting firm employed more than 30 staff at its offices in Belfast and Londonderry. Prior to the administration, part of the business – including the architectural, waste and energy services departments – was acquired by a former partner, 8 jobs will be safeguarded.