31/05/2006

Province's economic outlook 'unsettled'

Northern Ireland's economy has weakened further in the last quarter of 2005, according to the First Trust Bank's Economic Outlook report, which has predicted an “unsettled” period for the local economy.

The report notes that the condition of the economy reflects a slowdown in the national economy and the sharp decline in manufacturing sector output, but this was slightly offset by an increase in activity in the service sector.

The weakening in consumer demand recorded throughout the first three quarters of 2005 continued into the fourth quarter of 2005.

The housing market has continued to “overheat” as supply restrictions continue to have a greater impact than demand.

The report said that there was evidence that the labour market had reached a “turning point with both employment and unemployment marking time.”

Unemployment stood at 4.1% in February 2006, but the number of unfilled vacancies at 7.2% is lower than in the same period last year.

While, the report forecasts an upturn in demand for local businesses as wider economic conditions settle, manufacturing is likely to see further retrenchment in some sectors, with unemployment set to rise for the first time in several years.

The report said that personal incomes and consumer spending would continue to grow, but disposable income is set to be hit by the introduction of water charges and higher domestic rates.

Although general business conditions are likely to improve over the next 12 months as the national economy growth improves, the reports authors called on the business community top be “much more proactive in making local politicians aware of pressing economic issues.”

(SP/EF)

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