Job creation continues in NI, despite modest economic growth
- 236,700 net new jobs across the island of Ireland projected by 2022
- EY’s Economic Eye forecasts 4.9% GDP growth for ROI and 1.1% GDP growth for NI by end of 2018
- Firms now making ‘no regrets’ decisions in relation to Brexit
Belfast, 25 June 2018: New economic analysis released today from EY’s Economic Eye projects 236,700 net additional jobs in the period 2017-22 across the island of Ireland, with 9,500 of these to be created in Northern Ireland. The report shows that after 10 years, employment on the island has finally surpassed 2008 levels, with 74,500 jobs created over the 12 months to Q4 2017. In spite of the contrast in economic performance between the Republic and Northern Ireland, both economies are creating jobs.
The recent trend of divergence in economic performance across the all-island economy is projected to continue in 2018/19, Northern Ireland will experience modest growth of 1.1% and 1.2%, while the Republic of Ireland (ROI) is projected to enjoy growth of 4.9%. The slowing outlook for job growth in NI remains a feature of the Economic Eye forecasts, reflecting a projection that real income squeezes will finally begin to bite and Brexit uncertainty will at least result in a hiring pause for many employers.
Neil Gibson, Chief Economist, EY said: “The contrast between economic performances across the two jurisdictions appears wider than ever, though looking below the headlines suggests that the disparity is overstated by GDP figures. The labour market on the island of Ireland continues to impress, but the number one challenge reported to us remains attracting and retaining talent. The variance in the type of jobs being created has meant the job growth has been more evenly spread across the island than we have previously seen, with increased employment in all counties in the last 24 months. Pay increases are edging upwards, but remain more modest than would be expected given labour market conditions. Although pay rises are expected to pick up in 2018/19, structural changes in the labour market and high levels of global competition will moderate this improvement.”
Brexit Just 3% of NI firms have a Brexit strategy in place, according to Intertrade Ireland’s Quarterly Business Monitor. As the business landscape in Ireland faces continued uncertainty of the post-Brexit business landscape, Intertrade Ireland also found that 42% of businesses are now sourcing their Brexit news from social media, indicating how hard official agencies will have to work to ensure businesses are fully informed. EY’s Brexit team continues to rate a Free Trade Agreement as the most likely outcome of the trade discussions, though this has weakened slightly since the referendum. Evidence of Brexit fatigue amongst businesses remains a concern as 2019 will finally bring resolution to many of the key issues which will materially impact business.
Competitiveness With Brexit looming on the horizon, talent is the highest issue on the corporate agenda for the majority of businesses. According to EY, 64% of business leaders said that developing next generation leaders was the biggest challenge they face, followed by failure to attract and retain top talent (60%), which could be hindered further in the event of a hard Brexit.
Michael Hall, Managing Partner, EY Northern Ireland said: “Despite the on-going absence of local government, Northern Ireland’s economy has continued to grow, although growth remains sluggish. The overall corporate mood is much more positive than might have been expected, just one year out from Brexit and with little sign of clarity of the final terms of the UK’s exit from the EU. This reflects the ‘here and now’ of doing business where there is a real focus on continuing to identify new opportunities and at the same time scenario plan for different possible trading arrangements which are being contemplated during current negotiations. In the labour market, both jurisdictions continue to perform well with NI unemployment rates reaching historic lows.”
Read the Economic Eye summer forecast.