Investment in Knowledge Economy Needed
There is even greater need to invest in the local knowledge economy as Northern Ireland’s economy shrank in the second quarter of 2015.
The statistics are measured using the Northern Ireland Composite Economic Index (NICEI), which is roughly equivalent to Gross Domestic Product (GDP).
They are the most up-to-date figures for the economy, and show that optimism over growth may be premature. The local figures showed a contraction of 0.1% compared to GDP growth of 0.7% for the UK as whole in the same period.
No time for complacency
Over the year, growth in Northern Ireland was 1.3% which was below the UK performance of 2.6%. This shows how vulnerable the local economy remains and why longer term strategies for growth are needed.
The marginal decrease in the NICEI over the quarter was driven jointly by falls in production and manufacturing output and a decrease in public sector jobs.
Those decreases were partially offset by increases in the services and construction sectors.
The figures suggest recovery may finally be taking root in the construction sector as it made the largest contribution to growth over the year to June 2015.
The overall NICEI is now 3.5% above the low point reached in the third quarter of 2012.
But the recovery in the Northern Ireland economy has been much slower and weaker compared to the UK as a whole.
Many economists expect growth in Northern Ireland to slow in the medium term as the private sector attempts to take up the slack created by lower government spending. It is now time to look to new and innovative economic generators such as our universities and education sector.