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 Wednesday, 1 January, 2003, 13:04 GMT
Tough year for NI economy
BBC NI's business editor James Kerr reports on how global influences have impacted on the Northern Ireland economy.

It has been a tough year for the Northern Ireland economy, but for all that it remains in relatively good health.

Despite pressures on some key sectors, there is room for optimism that, should there be a global economic upturn, then the region is well placed to benefit.

There is no doubt that two global economic influences did have a significant impact locally - the fallout from the attacks on 11 September last year and the technology downturn.

Between them, these two put particular pressure two companies - Nortel and Shorts.

While they are only two companies, they have much greater significance.

Workforce

They and their suppliers employed more than 10% of the local manufacturing workforce between them. Never mind that, they also employed some of the most highly skilled and best paid engineers in Northern Ireland.

If those two firms caught a heavy flu, then many others in the high growth technology sector caught a cold. A large slice of manufacturing 'wrapped up warm' lest they suffered as well.

The result has been a drop in manufacturing employment and confidence.

A number of factors have helped many companies escape a worse fate. Included in this must be the size of the public sector, the strength of the service sector and the twin positives of low inflation and low interest rates.

The result has been that unemployment managed to touch record lows during the year and has not moved far off them.

The existence of the assembly at Stormont began to be felt in terms of economic policy and oversight of economic development agencies.

The public accounts committee in particular scrutinised the running of the Tourist Board very closely.

Potential

The Reform and Reinvestment Initiative, which aims to catch up on the backlog of spending on public services, was also launched by the executive during the year.

It has the potential to provide a significant boost to public expenditure on infrastructure and its agenda is clearly being pushed forward despite suspension.

The price of that initiative for industry is that it will have to pay rates for the first time, a fact that has been accepted with some reluctance.

Meanwhile, Invest Northern Ireland has adopted a relatively low profile approach to its major task of pulling together the work of more than three separate agencies. The new team have made some progress but still have a lot to do.

No economic review of the year in Northern Ireland would be complete without some comment on the fortunes of one of the region's industrial totems: Harland and Wolff. This may be the last occasion on which it warrants a mention.

From the beginning of 2003, the shipbuilding business will be mothballed, although the company will continue to operate on a small scale. The vessel currently nearing completion in the building dock could be the last of more than 1,600 to be constructed at Queen's Island.

Once, 30,000 people worked on the shop floor.

Within weeks that figure could be 25.

See also:

07 Oct 02 | N Ireland
02 Oct 02 | N Ireland
07 Nov 02 | Business Day
01 Jun 02 | N Ireland
11 Oct 01 | N Ireland
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