Economy stable but too reliant on consumer spending

The local economy is ‘relatively positive’ but is over-reliance on consumer spending which is unsustainable in the long term.

That’s the verdict of the Spring 2016 Economic Outlook from the Ulster University Economic Policy Centre UUEPC) which has also warned of significant global risks with the potential to impact growth locally, nationally and internationally.”

On the EU referendum, the Outlook suggests that a vote to leave would most likely have a bigger impact on Northern Ireland because of its land border with the Republic of Ireland as well as the relatively large size of the local agriculture sector.

Stating that the high profile job losses announced in the manufacturing sector in 2015 and early 2016 at JTI, Michelin and Bombardier have contrasted with several new investment announcements, the Outlook argues that this is a reminder of the volatile nature of global investment patterns.

Its forecasting model continues to suggest a relatively modest rate of growth pitched at 1.6% in 2016 and 1.3% in 2017.

“Economic performance has been reasonably strong over the last two years,” said UUEPC associate director Gareth Hetherington.

“Indeed, since 2012, Northern Ireland has created more jobs proportionally than the UK as a whole.

“This is encouraging but it is based on domestic consumer spending, which is positive in terms of creating employment across all parts of Northern Ireland but cannot be relied upon in the longer term.”