The Northern Ireland economy is expected to grow by only one per cent next year, according to the latest forecast by First Trust Bank.

But the bank, in its economic outlook and business review, points out that it is difficult to be definite about such predictions. Even a figure of one per cent is based on the assumption that the UK economy will avoid sliding into a full-blown recession.

The review says that stable employment growth and increasing public expenditure, along with a number of EU initiatives, will help the economy through to the year 2000. It says that manufacturing, engineering, chemicals, and metal fabrication have all performed strongly this year, but that the clothing and textiles sector, which has been under a severe competitive disadvantage for some time, has continued to suffer.

The study says that there is now a record number of unfilled vacancies in the Northern Ireland job market and that any inward investment resulting from political progress could be undermined by a shortage of skilled workers. It also points to the drain of skilled labour in information technology and engineering and says that the competition for construction workers is growing because of the building boom in the Republic.

Business confidence generally is fragile, with the strength of sterling still a major factor affecting the overseas sales of many Northern Ireland companies and cutting into profit margins.