THE DEPRECIATION in the value of sterling could provide much needed relief for key sectors of the Northern Ireland economy in 2009, according to officially commissioned forecasts.
Retail, manufacturing and agriculture could be the main beneficiaries from the reduction in the value of sterling, particularly against the euro, according to new economic forecasts compiled for the North’s Department of Enterprise, Trade and Investment.
The research, carried out by consultants Oxford Economics, suggests the decline in sterling will help firms operating in the manufacturing and agricultural sectors become more competitive.
Oxford Economics also believes sterling’s run of weakness against the euro will continue to encourage cross-Border consumers to travel North to shop.
The consultancy group’s latest forecasts for Northern Ireland warn that the economy will contract in 2009 but that it may be less affected than other regions of the UK. Oxford Economics predicts there will be “significant job losses” over the year. “Output in Northern Ireland is forecast to contract by 1.6 per cent, with 14,000 job losses expected,” it states.
The consultancy group supports the theory that the North’s large public sector should help Northern Ireland avoid the magnitude of job losses which have been experienced by other UK regions.
But it acknowledges there are some sectors, particularly construction, retail and manufacturing, which will be significantly affected by the slowdown.
The new forecasts were published yesterday in the Department of Enterprise’s latest Quarterly Economic Review.
The report highlights the difficulties experienced by many firms in the North in the third quarter of 2008 and the significant number of redundancies towards the close of the year. It shows that the financial, business services and construction sectors each suffered in the region of 2,000 job losses.Overall the slowdown in the local economy resulted in the number of confirmed redundancies in Northern Ireland increasing by 45 per cent between 2007 and 2008.
The North’s Economy Minister Arlene Foster said the latest Quarterly Economic Review reflected the fact that Northern Ireland was now “facing significant economic pressures”.
“Local businesses are continuing to face unprecedented challenges. Private sector output and employment are falling, whilst unemployment is on the rise, with a marked increase in the number of benefit claimants,” the Minister added.
She said the North’s Executive had taken several important steps to help Northern Ireland through the downturn. “We have worked tirelessly to encourage the local banking sector to help our businesses access sufficient support and funds.” Mrs Foster said the North’s Executive had also recently announced a £45 million assistance package to help local businesses.
