NI economy 'performing better than expected'

Ulster University economists have revised their forecast of Northern Ireland's economic growth

Northern Ireland's economy is performing better than had been expected at the start of the year, Ulster University economists have said.

The Ulster University Economic Policy Centre (UUEPC) has revised its 2024 growth forecast up from 0.8% to 1.4%.

It expects growth to accelerate to 1.7% in 2025, an upgrade on its previous forecast of 1.4%.

It also expects wage growth to outpace inflation this year with average real pay growing by 2.3%.

The UUEPC said this reflected "continued labour market pressures, stronger economic growth and lower inflation".

However, it expects pay growth to quickly return to its long term average of about 0.6% a year unless there is a marked increase in productivity.

Dr Myles Patton, principal economist at the UUEPC added: “The close correlation between productivity and wage growth reinforces the need for policy makers in both the new NI Executive, and the new UK government, to focus on measures that boost productivity levels.

"That includes capital investment and ongoing development of the skills base.”

Job market remains strong

Official data published in June suggested Northern Ireland’s services sector grew strongly in the first quarter of 2024..

The service sector is the dominant part of the local economy, covering a broad swathe of activity including retail, hospitality and business services.

Output expanded by 1.9% over the quarter and was 2.9% higher compared to the same period in 2023.

The figures also suggested consumer services such as retail and hospitality may have seen the start of a recovery after a difficult period of high inflation.

Services, like hospitality and retail, saw output expand by 2.2%

Northern Ireland's jobs market has also remained relatively strong in the first half of 2024.

The unemployment rate reached a new record low of 2% in May, the latest official figures suggest.

The overall jobs market remains healthy with the number of people on company payrolls growing to 808,000 in June.

That was a 2.4% increase compared to the same month in 2023.