Private sector leading the way to economic growth - Hamilton

First Minister Arlene Foster and Deputy First Minister Martin McGuinness pictured earlier this year with Brendan McGurgan, managing director of CDE Global, a firm with plans to create 110 jobs in the next five years
First Minister Arlene Foster and Deputy First Minister Martin McGuinness pictured earlier this year with Brendan McGurgan, managing director of CDE Global, a firm with plans to create 110 jobs in the next five years

The economy of the province grew by 0.4% over the first quarter of the year, according to the latest statistics contained in the Northern Ireland Composite Economic Index.

The figures show that the economy is estimated to have grown by 0.7% over the year from Q1 2015, driven by rises in the services and construction sectors, though gains were partially offset by decreases in the Public sector jobs index and the production sector.

Economy Minister Simon Hamilton said he was encouraged to see that the private sector continued to drive growth.

“Our recovery is characterised by strong employment growth. This was demonstrated by the recent Labour Market statistics showing the number claiming unemployment related benefits has fallen by over 7,000 people in the year to June 2016.

“The growth in output in the first quarter of this year was particularly encouraging with Northern Ireland matching UK GDP growth and also bucking the trend within the UK by posting double digit growth in exports during the same quarter.”

Referring to the “bold step” taken by the Executive to introduce the Voluntary Exit Scheme (VES) for the civil service, Mr Hamilton said the impact of almost 3,000 departures had not been as bad as was feared in some quarters.

“Even with that withdrawal, it is encouraging to see the growth of the private sector offset the impact of the VES,” he said.

“My number one aim as Minister is to transform Northern Ireland into a globally competitive economy. I want our economy to continue on the present path of constant improvement; growing in size and rebalancing from the public to the private sector.

“The private sector has seen annual growth of 1.6% over the year to March 2016, with exports up by 9% over the same period.

“It is a globally facing, innovative private sector that drives job creation and as much as we have made progress, we won't reach our full potential unless we continue to reform."

Commenting on the latest data, Dr Esmond Birnie, PwC chief economist in Northern Ireland said the message it sent was mixed.

“The good news is that the economy is still growing, but today’s figures also cast a sober perspective on the underlying performance of the local economy, relative to the rest of the UK,” he said.

“We are still 7.3% below the pre-2008 banking crisis peak level of output in the NI economy.

“So, in that sense, while the economic recovery and employment growth over the last few years has been welcome, it has also been incomplete.

“Today’s figures also confirm that the Northern Ireland economy has been slowing down for some time - this morning’s data indicated growth of 0.7% in the year to Q1 2016, but in the year to Q1 2015 the pace of growth was nearly three times greater, at 1.9%.”

The real challenge, he added, was to stimulate productivity and output and halt the slide.

“Addressing that issue will be a key element in the forthcoming Programme for Government where consultation ends in just a few days from now.”