In its last annual review of the Northern Ireland economy, PricewaterhouseCoopers concluded that in spite of the difficulties posed by the strength of sterling and a shortage of skilled labour, the long-term prospects remained good, with a growth rate of around 2.5 per cent over the next two years.
But Northern Ireland's economic progress can easily be undermined by television pictures of masked rioters and street barricades.
It is difficult to assess just how much effect this has on potential inward investors, but it was reported last year, for example, that the telecommunications company, Nortel, was having serious second thoughts about the wisdom of investing £95 million (€150.6 million) in its plant in north Belfast. The biggest casualty has been the tourism business. Foreign-registered cars are still a rare sight on Northern roads, and local tourism operators are forced to depend largely on local custom. Even that is depleted around what is known as "the July fortnight" when the Orange marches are at their height. Overseas visitor numbers in 1999 were 1.6 million, compared with 1.4 million in 1998. The total spend was £265 million, up from £217 million the previous year. But only just more than 300,000 of last year's total were holiday visitors, a figure that is significantly lower than 1995 (461,000), although better than the 263,000 in 1997.
The government document, Strategy 2010, which was launched in 1999, identified six key growth sectors in the Northern Ireland economy, and five sectors whose future was less rosy. Among the growth sectors are electronics, telecommunications, computer software, health technologies, tourism, and tradable services, such as call centres and back-office jobs. In electronics, the document is projecting a growth in turnover from £829 million to £2.5 billion. Employment in the telecoms sector is expected to grow by 5,000, from its level of between 6,000 and 7,500. Computer software is the fastest-growing sector of the economy, and the target is that it will employ 25,000 people by the end of the decade, generating £2.5 billion in revenue. In the health technologies sector, it is thought that output could grow from £170 million to £1 billion over the next 10 years, with employment rising from 3,000 to 13,000. In addition, the document also says that tradable services has the potential to create an additional 15,000 to 25,000 jobs by 2015.
The sectors facing more difficult market conditions are agri-food, food processing, clothing and textiles, engineering, and construction where output and employment is expected to fall significantly.
The availability of well-qualified computer graduates has helped to attract inward investment from some of the world's top companies, such as Seagate International, which has plants in Derry and Limavady, employing nearly 2,000 people.
In other sectors, however, Northern Ireland is still a low-wage area, and the gap with the rest of the UK has been widening rather than narrowing. In 1981, earnings were 91.5 per cent of those in Great Britain; by 1996 the figure was down to 87 per cent. Unemployment has continued to fall, continuing on a pattern of steady decline that began around five years ago. For many years Northern Ireland topped the unemployment league of UK regions with a figure consistently above 12 per cent. Today that figure is down to just more than 5 per cent, the lowest level since 1984. Mr Stephen Kingon of PricewaterhouseCoopers has said that while the 1990s had been one of the best performing periods in Northern Ireland's history, serious challenges lay ahead. Tight treasury controls on public spending, he said, would leave the Assembly facing hard choices. This was particularly so since Northern Ireland already lagged behind other regions in terms of infrastructure investment and provision. "The local economy created over 89,000 jobs in the last decade and in some areas outperformed the rest of the UK," Mr Kingon said. "However, between now and 2010, we must create 132,000 jobs to employ a growing workforce.
"That means generating 13,000 jobs a year. The existence of the Assembly has been a considerable boost to business confidence, but we should have no illusions that continued investment - both indigenous and from overseas companies - is directly linked to the maintenance of political stability."
