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Last Updated: Tuesday, 18 January, 2005, 07:43 GMT
Economic debate is 'long overdue'
Manufacturing has been hit hard in Northern Ireland.
Underlying problems in the Northern Ireland economy will have to be addressed as government spending on the public sector slows, a new report says.

Accountancy firm PricewaterhouseCoopers said high levels of public spending had helped to drive unemployment to a record low.

However, it has masked a decline in the manufacturing base which had to be faced up to, the study said.

The report predicted the economy would grow by about 2.6% this year.

Public expenditure

The 25th annual review of the Northern Ireland economy said that one in three Northern Ireland workers were employed in the public sector.

The authors said this masked the fact that Northern Ireland had lost proportionately more manufacturing jobs between 2002-4 than any other region in the UK.

PwC managing partner Stephen Kingon said: "If historic high levels of public expenditure growth were maintained, the economy should continue to grow at 2% to 3% per annum, but the Northern Ireland budget shows public expenditure growth falling between 2005-2008.

"That, combined with measures to reform and reduce the civil service, suggests current economic growth will not be sustained.

The economy is reliant on public sector spending
The economy is reliant on public sector spending

"Employment growth in the public sector and private services conceals a shrinking manufacturing base, a service sector largely reliant on relatively high public sector wages and an economy where more than 80,000 are now registered as long-term sick - a 300% increase in the past decade."

Mr Kingon said that "the comfort of public expenditure" had caused a failure to debate the future of the economy.

He said that successive strategies and recommendations emerging from Strategy 2010, the Northern Ireland Assembly and the Economic Development Forum had been sidelined, or ignored.

"This debate is long overdue, and if the Northern Ireland political parties want to have economic flexibility in a devolved assembly, they should begin the debate before direct rule ministers deliver a policy programme that defines the economy for the next decade," Mr Kingon said.

NI economy 'on the right track'
30 Dec 04 |  Northern Ireland
Workforce 'more fairly split'
10 Dec 04 |  Northern Ireland
Northern Ireland 'grows old fast'
25 Nov 04 |  Northern Ireland

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