NI improves its fiscal deficit and boasts the lowest jobless rate in the UK but the economy stalls

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, NI had a deficit of £9.4bn, a smaller shortfall than the £9.7bn recorded in 2018. This compared with London, which had the highest surplus of £38.9bn.

On a per person basis, the NI deficit was £4,978, lower than the £5,169 recorded in 2018. London had the highest surplus of £4,369 per person whereas Northern Ireland had the biggest shortfall.

The only areas of the UK to run surpluses were London, the SE of England and the East of England. The West Midlands and the North East were the two regions in the UK to increase their net fiscal deficits over the year; the other seven regions reduced their shortfalls.

At a national level, the UK had a deficit of £623 per person which splits into deficits of £68, £2,713, £4,289 and £4,978 for England, Scotland, Wales and Northern Ireland respectively.

Public spending in NI was £27.9bn or £14,821 per head, an increase on the 2018 figure of £27.4bn. London had the biggest spend of £123.9bn or £13,826 per head whereas at £27.9bn Northern Ireland had the lowest. NI will receive a funding boost following the restoration of devolved government. Total government spending was £853bn or £12,835 per head.

NI collected £18.5bn in taxes in 2019. London contributed the most to the Exchequer at £161.9bn, compared with the lowest contribution which was from the Province. Overall the state raised £811.3bn or £12,213 per head in taxes, an uplift of £34.1bn or £461 per head compared with 2018.

More data from the ONS showed unemployment in NI fell by 5,000 to 21,000 between September and November 2019; the substantial drop of 0.6% took the overall rate to 2.3%, the lowest in the UK. The national rate is 3.8%.

The South West had the highest employment rate at 79.8% which compared with 72.6% in NI. UK employment was estimated at 76.3%.

NI average property prices increased by 2.3% during Q3 2019, the uplift to £139.951, increased annual growth to 4.0%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

Figures from the official Northern Ireland Statistics and Research Agency showed output fell 0.1% over the quarter to September which meant the economy had expanded by 0.3% in the 12 months to September 2019.  The comparative UK figures for the same periods were 0.4% and 1.1%.

Over the quarter, construction was up by 0.2% but production fell by 0.4%. Overall the private sector was 0.3% smaller than earlier in the year.

The NI figure was poorer than the more volatile nowcast estimate from ESCoE in November. Part of the gap can be explained by slightly different methods of calculation but it is clear that the economic picture is deteriorating.

On development, listed Belfast-based IT firm Kainos has been valued at more than £1bn. Kainos specialises in digitalising its clients’ operations. Kainos employs 1,550 people across 12 offices and is planning to develop a new headquarters in Belfast over the next two years.

Planning has been approved for a new 276-bed hotel in the Titanic Quarter in Belfast. The hotel will be the third to open recently. A Premier Inn was part built as part of the first phase of the development and the boutique Titanic Hotel opened in 2017. The Titanic centre generates c£160m in economic benefit, in 2017 it had c770,000 visitors.

Coleraine-based Armstrong Medical is investing £8m in an expansion project which includes new machinery and a new 26,000 sq ft warehouse. The firm specialises in respiratory products for use in healthcare and exports to 60 countries. Invest NI has offered £800,000 to support the creation of 24 new jobs.

In Carrickfergus, Sensata Technologies is to close its factory with the loss of 270 jobs. The firm makes tyre pressure sensors and will wind down on a phased basis before closing in early 2021. The firm will retain its Antrim factory although some operational support roles there will also be cut.

East Belfast based Crane Stockham Valve, part of Connecticut-based Crane Co, is closing its factory next year, 63 jobs will be lost. The firm makes valves and pipe fittings. The NI operation has a total headcount of 89 of which some will move to a smaller office and others will be redeployed to other factories.

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