Growth 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.