Economy warning over deadlock

Economy warning over deadlock

Public spending is key to Northern Ireland's economy

The political deadlock in Northern Ireland is affecting the prospects of inward investment from the United States, a senior economist has warned.

PricewaterhouseCoopers' managing partner Stephen Kingon said the province had to be seen as a stable and attractive investment location.

Mr Kingon said foreign investment was currently 30% of what it was three years ago, adding that the region needed to "paint a vastly more attractive picture to the few investors currently scouting EU locations".

"The economy should be on the top of the political agenda, but unfortunately it is not and the lack of political progress is being perceived unfavourably in the USA, the biggest source of foreign direct investment," he said.

PricewaterhouseCoopers has reported that Northern Ireland is relying on public spending to boost economic growth.

In the firm's latest economic outlook, a slow recovery for the economy was predicted.

The report said Northern Ireland would be one of only five regions where growth would be more than 2%. Mr Kingon said it needed to grow faster.

"Northern Ireland has successfully delivered 2% growth since the mid-1990s, so this forecast represents little challenge.

"Northern Ireland performs well because of continued public expenditure locally and relatively poor growth in other UK regions," he said.

Manufacturing slowdown

The report said slow manufacturing and falling export demand continued to hit Northern Ireland and warned that growth in business services, seen as contributing to increased employment in the late 90s, had stalled.

The province was one of three regions experiencing difficulties on that front, it said.

Mr Kingon said future prospects were mixed against that background.

"Although we believe that the UK is gradually recovering, the level of recovery is - and will remain - modest.

"With over a third of Northern Ireland exports destined for GB markets, this will pose problems for manufacturing exporters and investment confidence."