Northern Ireland recession forecast to end within year
Economic experts have said Northern Ireland's economy will emerge from recession in the next 12 months.
The prediction is contained in a report on the economies north and south of the border, published on Wednesday by accountancy firm Ernst and Young.
NI is continuing to do better than the Republic, in part due to a strong manufacturing sector.
The report also warned that Stormont must take "decisive action" for growth to continue.
Graeme Harrison, senior advisor to Ernst and Young Economic Eye, said political leaders in Northern Ireland must act quickly if they want to transform the economy.
"I think it will be very difficult for the assembly to agree cross-party on the cuts, especially with an eye on the forthcoming elections.
"The Comprehensive Spending Review budget given to Northern Ireland was not too bad a deal, so if they choose to they (Executive) can avoid cuts in the short term,"
But Mr Harrison warned that a delay in implementing cuts was only putting off the inevitable.
He said: "The NI economy really has to transform and become more private sector orientated really quickly so putting off (the) cuts by one year is not an optimal outcome."
According to the all-island economic forecast, Economic Eye, NI unemployment is to remain above 6% indefinitely and in the Republic it is to remain above 10% until at least 2018.
The report confirmed that the rate at which jobs are being lost has eased.
This is particularly the case in the Republic where the sharp initial falls in construction and manufacturing have slowed.
In NI, the forecast is for unemployment to remain above 6% indefinitely given its greater reliance on the shrinking public sector for employment.
The report forecasts a reduction in public administration employment for NI of around 6,000 (11%) between 2010 and 2015.
In the Republic, the forecast is for a similar contraction in public administration of around 10% between 2010 and 2015.
The report said the global economy remains key for economic growth across the Island.
NI's economic growth is expected to lag behind the wider UK, which is projected to perform well due to strong service sector growth, "driven predominantly by London's position as a global centre" for financial and professional services activity.
Ireland's 2011 GDP growth will remain one of the worst in the Eurozone, ahead of only Portugal, Italy, Greece and Spain, the so-called PIGS nations.
In Northern Ireland the Executive is having to play a balancing act, though without the same level of risk in terms of overall economic stability or international reputation.
The report stressed the need for the Northern Ireland Assembly to implement deep cuts "for long term economic recovery".
The report also paints a bleak picture for the housing market on both sides of the border, with all-island house values not forecast to reach peak values until beyond 2020 .
It said: "House prices will continue to contract in both NI and ROI for the remainder of this year, in contrast to the UK where modest rises were enjoyed before prices started to fall back slightly in a double dip pattern.
"With the labour market remaining uncertain and demand for new housing in the Republic extremely weak, given net migration outflow, house prices are forecast to fall once again in 2011."