PwC: Northern Irish economy sees modest recovery

10 April 2015 Consultancy.uk

The Northern Ireland economy has seen a slow pickup following the economic crisis. However, the recently released ‘NI Economic Outlook’ from PwC highlights that NI continues to face difficult times. While total employment is up 3.4% since 2012, average earnings in real terms have decreased by 2.2% since last year.

The PwC report highlights that in terms of an overall snapshot of the near term economic outlook of Northern Ireland (NI) there is a considerable discrepancy with the wider UK. Over the past three years growth is consistently almost 1% behind that of the UK as a whole, with the smallest difference projected in 2015 at 0.8% less than the UK’s 2.5% growth.

NI and UK growth projections

Employment market
While there is good news for NI as the number of people on an unemployment benefit declined by 11,400 to 46,200, reducing to 5.2% of the percentage of NI population, the number remains more than twice the UK’s 2.4% average and is consistently the highest of all 12 of the UK regions.

The unemployment rate in NI stood at 6% for the period November 2014 to January 2015. Although this is a 1.5% fall compared to last year and 0.3% to the previous quarter, it is still slightly higher than the UK average of 5.7%.

Unemployment claimant rates

In general, job growth in NI has improved by 3.4% from 700,150 to 723,670 between December 2012 and December 2014. In that period, the Pharmaceutical Products sector saw the biggest growth, at 12.1%, while the Energy and Waste saw the biggest drop of -9.0% of employed 5,670 to 5,160. The Business Services sector saw growth of 3.7%, increasing from 33,470 to 34,710. PwC notes the relatively strength in consulting growth in the previous twelve months helped buoy the sector, with Kainos announcing 403 new jobs, PwC announcing an additional 807 jobs, while EY, Citi and Deloitte unveiled recruitment plans for 486, 600 and 338 new employees respectively.

While employment is up since 2012, the consulting firm finds that average earnings in the year to April 2014 were declining in cash terms, down by 2.2% while the rest of the UK experienced a nominal growth of 0.6%. According to the authors, “these data indicate a worrying trend. Northern Ireland's overall employment is increasing, but is not being matched by either growth in average wages or increasing productivity.”