Danske Bank forecasts NI economic growth but warns of job cuts

Danske Bank's chief economist Angela McGowan said there had been a "feel-good factor" in Northern Ireland's economy in the second quarter of this year but the improving picture had not yet led to wage rises

The Northern Ireland economy should grow at 2.4% in 2014 and 2015 but 2,400 public sector jobs could be lost in that period, Danske Bank has forecast.

The bank's quarterly sectoral forecast said improvement in the jobs market and a number of foreign direct investments injected momentum into the recovery.

The data was recorded during the second quarter of this year.

However, the bank warned that continued austerity could force government departments to reduce staff numbers.

Northern Ireland's latest official jobs figures suggest that in the first quarter of this year the private sector added 3,860 jobs while the public sector lost 130 jobs.

Danske Bank's report pointed to strong growth in professional and business services like accountancy and recruitment.

Its chief economist Angela McGowan said there had been a "feel-good factor" in the economy in the second quarter of this year.

She said this could be seen in rising levels of household spending and improved levels of business investment.

However, she added that households may feel "a little cheated" as the economic improvements are still not translating into rising earnings

She anticipated that there should be some upward pressure on wages growth in the second half of this year.

The overall 2.4% growth figure matches the forecast of the financial consultancy EY, which published its predictions last week.

The EY Economic Eye said that consumer and government spending would continue to be the main drivers of growth this year.

However, it warned that the reliance on those sectors is unsustainable and that the outlook is slightly less positive for 2015.