Northern Ireland’s economy has continued to underperform the Republic’s in key areas like national and household income, but it is growing at a faster pace than the United Kingdom in general, according to a new report.
On Monday, the Economic & Social Research Institute (ESRI) published new research comparing cross-Border economic trends.
The report is the first in a series to examine economic developments and linkages between the two economies conducted by the think tank in conjunction with the Department of the Taoiseach’s so-called Shared Island unit.
Written by economists Alan Barrett and Adele Bergin, the report notes that both economies were growing up to the end of the second quarter of this year.
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Northern Ireland’s economy grew by 2.8 per cent on an annual basis, while modified domestic demand – a metric that attempts to strip out the distorting effect of multinationals in the Republic – grew by 3.2 per cent over the same period.
“While the rate of growth in Northern Ireland lags that of [the Republic], the rate for Northern Ireland is more than double that of the UK in the same period,” the report’s authors said.
Employment in the North is also growing at a rate “comparable” to that of the Republic, rising by 2.5 per cent and 2.3 per cent respectively in the 12 months to the end of June.
The North’s unemployment rate was also substantially lower than the Republic’s at the end of the second quarter, “although this must be viewed in the context of the lower participation rate in Northern Ireland”, the authors said.
However, the report also highlights the difficulties in comparing the two economies, due to gaps in the data. Data for the North is “generally available with more of a lag” than for the Republic, particularly in relation to demographic indicators, it found.
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The economists said that developing comparable data on an all-island basis “could support more effective labour market planning”.
For example, a greater understanding of how students and workers move between the jurisdictions “could help identify opportunities to better align training provision with demand, facilitate targeted investment in education and employment supports, and promote more co-ordinated workforce development strategies”, it argued.
“Improved cross-Border collaboration on data collection and reporting is a strategic priority for future analysis.”
Commenting on the report’s publication, Mr Barrett said: “It is exciting to be starting this annual series tracking the economies of Ireland and Northern Ireland. Comparative studies across countries are a standard method for generating insights.
“Our goal is to assess over time how the two economies evolve and how policy is influencing those evolutions, always with a view to informing policy.”
Publishing the report, Tánaiste and Minister for Finance Simon Harris said the annual series would “build on” previous ESRI research done on behalf of the Shared Island programme.
He said the annual series would look at “broader and deeper” data comparisons to yield insights and “food for thought”.
“The series will build up a crucial evidence base on economic similarities and differences, North and South, and help identify how we could cooperate more for mutual benefit, across a range of policy areas.”
He said insight into the similarities and divergences north and south – such as differences on sectoral structure, labour market participation and overall rates of education attainment – were “vital” metrics needed to develop more cooperation on the island.
He said that he agreed productivity, competitiveness, and decarbonisation “all hold strong potential for future work by both administrations”.
“It with this context of success and of opportunity – and recognising also that there are challenges and there are divergences in our economy and society, North and South – that the new ESRI research series will engage – mapping, analysing, informing and spurring debate.
“That is exactly what we need to help inform and deepen the cooperation agenda and indeed a wider island-wide conversation.”
