DUBLIN: The Northern Ireland economy will grow by less than 2% in 2016, Danske Bank has predicted. The bank’s chief economist Angela McGowan said that while recovery will continue, the pace of growth “will not be overly exciting”. Northern Ireland suffered a deeper recession than the rest of the UK and has had a slower recovery.
Ms McGowan expects the strongest growth in the IT sector, with output predicted to increase by almost 5%. She also expects recovery to continue in the construction sector with an output growth of 1.6% in 2016 and 2.6% in 2017.
She said this would be driven by continued improvement in the housing market and Stormont’s increased infrastructure budget. The manufacturing sector, which came under pressure in the second half of 2015, is forecast to grow by 1.9%.
Ms McGowan said that part of the forecast assumes that the euro area economy will continue to strengthen in 2016, which should support demand for Northern Ireland exports. She also predicts growth of 2% in the retail sector driven by low inflation and rising real wages.
The main factors predicted to limit growth are public sector austerity and the UK’s likely in/out referendum on membership of the European Union, which Ms McGowan said could delay investment decisions.
“Although the public expenditure cuts do not look as harsh as we had initially expected, there is still a dire need for the private side of the economy to expand output, raise revenue streams and create jobs,” she added.
