Northern Ireland's economy is shrinking and could be on "the brink of recessionary territory" one of the North's key business leaders have warned as UK prime minister Theresa May visits the Border region to reassure businesses about Brexit.
Angela McGowan, Northern Ireland director of Confederation of British Industry (CBI), said a new report that examined the North’s economic performance during the first quarter of this year contains a “stark warning for the Northern Irish economy”.
The Northern Ireland Composite Economic Index, published by the North’s Statistics Agency and Department of Finance on Thursday, shows that economic activity fell 0.3 per cent from quarter four in 2017 to quarter one in 2018.
Ms McGowan said the report reveals “worrying levels of economic contraction”.
“With two consecutive declines in economic activity in the middle of 2017, the region looks to be on the brink of recessionary territory.
“Although we saw a small upturn in the economy in Q4 of 2017, a contraction of 0.3 per cent at the beginning of this year should give everyone pause for thought. The private sector, the public sector, production and construction have all contracted, leading to wide-ranging repercussions that extend well beyond the business community,” Ms McGowan warned.
Against the backdrop of Theresa May’s visit to the North to try and reassure businesses that she remains committed to a Brexit deal that “avoids a hard border and protects the Belfast Agreement”, the director of one of Northern Ireland’s largest business organisations said it was clear that “the current political vacuum and Brexit uncertainty” were taking their toll on the local economy.
Construction woes
It is not just the CBI in the North that is alarmed by new economic data. Separately the Construction Employers Federation (CEF), said the latest Northern Ireland Construction Bulletin for the first quarter of 2018, also released on Thursday, shows that the total volume of construction output in the first quarter of 2018 slumped by 6.5 per cent compared with the fourth quarter of 2017.
John Armstrong the CEF’s managing director believes the bulletin illustrates just how the construction industry is suffering in the North because of politics.
“While Brexit completely consumes our political discourse, this survey is a pretty stark reminder of the actual reality of what contractors are having to deal with day to day,” he said.
According to Conor Lamb, chief economist with Danske Bank in Northern Ireland, the continued uncertainty that Brexit continues to generate is “dampening business investment” in Northern Ireland.
He said the latest economic reports also provided little doubt that the North’s economic performance this year was going to be “underwhelming”.
