NI economic downturn continues

Image caption,
Mr Ramsey said job losses are likely to continue following the Comprehensive Spending Review

The latest report on the economy from the Ulster Bank has revealed that the downturn in the Northern Ireland private sector continued in September.

The NI economy still in decline but there were some signs of recovery across the rest of the UK.

The local economy continued to suffer, particularly in the construction sector, where job losses accelerated for the fifth month in a row.

Construction firms are shedding jobs at the fastest rate since March last year.

Ulster Bank chief economist Richard Ramsey said that is likely to continue following next week's Comprehensive Spending Review, which is expected to reveal big cuts in areas such as roads, schools, and hospitals.

"The construction sector has already been badly hit by the downturn in the housing business," Mr Ramsey said.

"While spending on infrastructure had held up well until the beginning of this year, it has been declining since then, and next week we are likely to hear about major cutbacks in public sector investment.

"Less investment means less work, and fewer jobs."

The only positive sign for the economy is in the local manufacturing industry, where output went up in September, thanks largely to demand from expanding markets in Asia and South America.

In fact, in the third quarter of 2010, the manufacturing sector recorded its strongest rate of growth since 2007. In other sectors, however, the outlook is less bright.

"The Spending Review is likely to have a more negative impact on Northern Ireland than elsewhere," Mr Ramsey said.

"What this latest survey highlights is the fact that the local economy is in a much weaker state than any other UK region, and less well able to withstand the effects of reductions in public sector spending."