NORTHERN IRELAND’S exposure to Republic’s ongoing difficulties and the UK’s weak recovery are two of the key reasons why the local economy will grow by only 0.6 per cent in 2011, according to a new report today.
According to business advisers PricewaterhouseCoopers (PwC) the fallout from the euro zone crisis will also impact on the North’s economy which is why it has revised down its economic forecasts for Northern Ireland.
In its latest quarterly Northern Ireland economic report PwC highlights that the local manufacturing sector is performing well when it comes to exports but it warns that “growth is both elusive and marginal”.
PwC’s chief economist Dr Esmond Birnie says external factors and reduced public spending are having an adverse effect on the local private sector.
Dr Birnie says confidence remains low driven by global and domestic issues.
He claims uncertainty in the euro zone over the economic stability of the Greek, Spanish and Italian economies has increased investor and business risks in key external markets and this has had a knock-on impact on order books, cash flow and financing for local businesses.
Overall the latest PwC report states that the North’s economy is “structurally weak” and has a relatively high reliance on the public sector.
Dr Birnie says that while the next four years will see a major reduction in public spending, structural adjustment takes decades.
PwC also examines access to commercial finance as a key issue for the private sector.
It says the percentage of successful applications from Northern Ireland private companies for commercial bank finance fell from 92 per cent in 2007 to 65 per cent in 2010.
