Political stalemate 'bad for business'

Published Friday, 25 July 2014
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A senior economist has said political stalemate and lack of worker productivity is hampering the Northern Ireland economy's recovery.

Political stalemate 'bad for business'
Low wages have held back the NI economy. (© Getty)

Following a six year downturn, the UK economy has returned to the level it was at before the economic crash.

Gross domestic product for the UK, which is a key indicator for growth, has increased by 0.8% for the second quarter in a row.

Growth is at 3.1% overall for the entire UK, however, the Northern Ireland economy is lagging behind with economists predicting a growth rate of around 2.2%.

Esmond Birnie, chief economist of accounting firm PricewaterhouseCoopers said indecision around the Executive table played a part in the regions poorer performance in relation to the rest of its UK counterparts.

He told UTV: "What the latest figures show is that the UK economy recovery is continuing and it's now larger than it was than at the start of the downturn.

"The problem in Northern Ireland is we had such a big decline after 2008 that we are still probably 10% or so under that level.

"As many people will know, we are still in a world where wage levels and living standards are very depressed relative to what they were and it will take a number of years to recover that ground unfortunately."

He added: "Part of the reason is that prices are increasing more rapidly than elsewhere and wages were lower to start off with and there seems to be an underlying challenge in the economy of achieving a higher level of productivity or output per worker.

"There is a limit to what government can do so there needs to be a partnership with the private sector.

"However, the Executive has said the economy is their top priority, but that is not so clear on the evidence of their decision making.

"Ongoing wrangles around welfare reforms and budgets suggests, in practice, they find it difficult to truly make the economy their top priority.

"Welfare reform may not actually have a huge effect as it is one part of a much bigger jigsaw, but it is indicative of a number of important issues affecting the economy and other areas where there is deadlock and delay in decision making.

"Such uncertainty is not good for business."

© UTV News
Comments Comments
seanie in dungannon wrote (118 days ago):
this stalemate plus dissidents flegs and now race attacks habe already detered investmeny from mainland europe.... and if sn unemployed person has to dtart on minimum wage at least they csn gain experience and training and work up the ladder...like a lot of us have done
rob in Belfast wrote (118 days ago):
"there seems to be an underlying challenge in the economy of achieving a higher level of productivity or output per worker.".... When all else fails blame those below... We live on the north west corner of Europe and are cut of from the bulk of Europes population by two large bodies of water, our level of econmic output is never going to match that of larger more centralised populations. Add to that our much cooler climate and our food production is more limited. Our main selling point in the past was always lower wages, but with mass immigration that no longer even applys. Even our own industries imports their own work force, or out source to the likes of China. Wills in Belfast is spot on.
D in belfast wrote (120 days ago):
there should be a 10 year grace period for northern ireland with regards to changing welfare here since we suffered from decades of violence over here which the rest of the uk did not..wars leave a legacy
Wills in Belfast wrote (121 days ago):
It won't make any difference to the working class on low wages, might as well be unemployed, the middle class crying poverty again.
John in crumlin wrote (121 days ago):
our politicians are bad for business
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