Reports out today suggest that there will be a significant boost of nearly 6% in consumer spending in 2021 which will be excellent news for the economy here in Northern Ireland. However it is thought that the jobs market will take a lot longer to recover from the effects of the Covid-19 pandemic and it may not be until 2024 that the market fully recovers. There is also a worry that higher consumer spending could lead to higher prices in the shops.
The Scale Of Government Support Has Been Extremely Helpful
This comes from a report by the Economic Eye and in an article in the Belfast Telegraph today by Margaret Canning, the Economic Eye Ireland chief economist Professor Neil Gibson is quoted as saying:
“A contraction of more than 10% in 2020 would normally be expected to be accompanied by similarly adverse labour market conditions but the scale of government support has, so far, prevented such an outcome.
“Though job losses are projected later in the year, the unemployment level is not expected to reach the double-digit levels that were feared.
“Rising commodity prices, extra costs associated with health guidelines and Brexit allied to high levels of government and consumer spending would usually suggest the environment is ripe for prices to go up. The hope is that this does not trigger a damaging spiral in wages and future prices, but firms and policy makers should be alive to the risk.”
People Are Now Ready To Spend The Cash They Have Saved During Lockdown
The levels of consumer spending have been aided by a steady stock market and house prices says the report, with people now ready to spend the money that they have saved during the protracted lockdown period. The report also mentions that there could be “much to gain for NI from a new era of global investment if a “mutually satisfactory solution” is reached between the UK and EU in their talks over the NI Protocol.”
We sincerely hope that this is the case as many businesses depend on having easy and affordable access to both the UK and EU markets. If common sense prevails I am sure a solution will not be too far away.
That is all for today, but as ever if you require any assistance with your accounts please get in touch with our ever friendly staff here at WHR Accountants by giving us a call on 028 3752 2909 and we will only be too glad to help.