Contraction In N Ireland Economy Down To Decline In Public Sector Output

The latest figures from the NI Statistics and Research Agency (Nisra) reveal that the economy in Northern Ireland contracted by 0.2% in the final quarter of last year. The private sector remained pretty flat over this period, but it was the public sector output that declined.

Public Sector Strikes Have Certainly Had An Effect On The Economy

Some of the decline will have undoubtedly been due to the public sector strikes that have had such an effect on services over the last few months. The fact that the Stormont Executive is now sitting once more and the government have been given some funding will hopefully mean that many of the public service pay disputes going on will soon be resolved. Although this is far from a done deal.

If we look at 2023 as a whole the data shows that the Northern Ireland economy actually grew by 1.4%, not an exceptional rise but at least climbing in the right direction.

In an article on the BBC News website a spokesperson for the NI Statistics and Research Agency (Nisra) is quoted as saying that:

“challenging conditions remain for households and businesses who are adjusting to the upward shift in price levels for goods and services and the higher interest rate environment”.

The Economy Is Likely To Have Bounced Back At The Start Of This Year

Looking at the start of 2024, the data suggests that the economy will bounce back and recover from the fall at the back end of last year. However the economy overall looks likely to stay pretty flat over the course of the year. The Ulster University Economic Policy Centre (UUEPC) has forecast that the economy will grow by around 0.8% in Northern Ireland in 2024, and around 1.1% in 2025.

There are a number of reasons why the economy is stubbornly refusing to grow like we would all like to see it do. Looking back there have been terrible repercussions both economically and socially from the Covid-19 pandemic which shook the whole world so badly. Then there has been the war in Ukraine which has impacted on the price of so many important goods.

Recently we have had double digit inflation which was causing such concern to businesses and households. And to tackle this inflation the Bank of England decided that the only way to control these price rises was to dampen down the economy, so they have imposed ever higher interest rates on us, which has also had an effect on economic growth. Northern Ireland, and indeed the whole world, needs a period of calm and stability so we can all reset and look to a more positive future.