Increase In Economic Productivity In NI Unlikely To Be Long Term Say Academics

At first glance it seemed that, as Northern Ireland was driving forward and increasing its economic productivity, there were real signs of progress being made. But academics at Queen’s University in Belfast have poured cold water over the recent increase in productivity, suggesting that it was a one off event which happened as a consequence of the Pandemic.

A Rapid Improvement Occurred During 2020 And 2021

The rapid improvement occurred during 2020 and 2021 and elevated NI up to 7th out of the 12 UK regions in terms of productivity, previously it had always languished at the bottom of this particular table. Productivity growth increased by 6.7% in this period, higher than any other region.

Here is what Queen’s academics John Turner, David Jordan and Ruth Donaldson said about this growth, as copied from an article by John Campbell on the BBC News website:

“Between 2019 and 2021, NI saw the largest decrease in the number of hours worked of any region, falling by 10%.

“It also saw the smallest decrease in the total real value of economic output (GVA), falling by only 1%. Together, these had a large positive effect on NI’s productivity growth.”

Long Term Improvements Seen In Levels Of Tertiary Education

So it is likely that, when hours returned back to their normal levels once the furlough period ended, then the output per hour will have receded once more. However the academics did find some positives during their analysis. In the same article they pointed out that:

“Long-term improvements continue to be seen in levels of tertiary education and those with no skills.

“There has also been a welcome short-term reduction in economic inactivity, although this still remains the highest rate of any UK region.”

An increase in economic productivity, which is obviously linked to growth, is vitally important to Northern Ireland, and indeed all regions of the UK. It is economic growth which drives up living standards in the medium and the long term.

Unfortunately, over the last decade or so, the UK has lagged behind many other countries in Europe when it comes to growth and as a consequence our living standards are not at the same levels as such as Germany or France. Over this period there has been less investment in the economy, when compared to these countries, from both government and business, and this lack of investment is now coming home to roost. This needs to be rectified if we are to become a more prosperous place to live.