Report

Construction output growth in Northern Ireland is projected to average 0.5% a year over the 2018 to 2022 period, a slower growth rate than across the UK as a whole. However, output is expected to sustain a level not far short of £3bn (2015 prices) during the forecast period, not seen since the 2008/09 recession.

Nevertheless, given expected productivity gains, this level of expansion in output will not be enough to drive an overall increase in employment, which is predicted to fall by 0.4% a year on average over the five-year period. Due to net outflows from the devolved nation, there will still be an annual average recruitment requirement (ARR), estimated at 310, 0.5% of base 2018 employment, a lower ratio than for the UK of 1.2%.

GVA growth in Northern Ireland is projected to lag the UK’s by around 0.3% a year on average over the forecast period (1.7% vs. 2%), the almost inevitable consequence of two factors, the one mentioned in the previous section regarding the economic structure of the devolved nation’s economy, and secondly, lower population growth. GVA growth in recent years has been driven as much by overall increases in population as any productivity gain and unless this is addressed, lower
population growth will inevitably mean lower GVA growth.

Population growth in Northern Ireland over the five years to 2020 is projected to average 0.5% a year, a little down on the UK rate of 0.6%.

The key challenge in Northern Ireland is to rebalance the economy towards a more dynamic private sector base. The pace of diversification has been relatively modest and reliance on the relatively slow-growing public sector and manufacturing (in most years at least) is a hindrance.