Page last updated at 09:33 GMT, Tuesday, 10 November 2009

NI enduring 'worst ever' slowdown


A report on the economy indicates that Northern Ireland is in the midst of its worst ever slowdown.

The report, by accountants Ernst and Young, claims the all-island economy will shrink by 7% this year.

It adds that Northern Ireland and the Republic could still be twelve months to two years away from economic growth.

One of the report's authors says that while there are some signs of recovery, there is a possibility of a "double-dip" recession.

A "double-dip" recession occurs when the economy contracts after a quarter or two of economic growth.

If that does happen, it is sometimes a sign of a deeper and more prolonged recession.

Oxford Economic's Neil Gibson, who contributed to the report, said that while there has been a slowdown in the rate of job losses, that has to be viewed in the context of a significant reduction in public spending.

"The economic conditions have improved somewhat in the past few months and the all-island economy is starting to look a little more positive," he said.

It's going to take at least five years to recover the number of jobs that we lost in the last 24 months
Neil Gibson, Oxford Economics

"That said, the challenges are still quite significant going forward and we would characterise the mood on the island as one of fragile optimism.

"Looking better for the major corporates as world economic conditions improve but remaining very difficult for the public sector and for consumers."

"Front and centre"

Unemployment figures released last month showed the smallest monthly rise in more than a year.

The rise of 2.1% month-on-month was the smallest increase for 15 months.

However prospects for the employment sector were still gloomy with the unemployment rate now over 7% compared to a rate of 4.3% this time last year.

Mr Gibson added that it was going to be a "long road back" to relative economic prosperity.

"It's going to take at least five years to recover the number of jobs that we lost during the last 24 months," he said.

"It's going to be a painful time for consumers as they find prices in the high street stopping the steady fall that we have seen.

"What really matters now is that our local executive turns all eyes and all attention on doing all that it can to put the economy front and centre as it suggested in the programme for government."

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