Increased public expenditure will be key to stabilising and strengthening Northern Ireland's economy in coming years, according to the autumn Economic and Business Review from First Trust Bank.
Public expenditure is one of Northern Ireland's main economic aggregates, the report says, and it is set to rise by more than £1.3 billion between 2001-02 and 2003-04. This comes on top of the increases announced in the March 2000 budget.
Foreign direct investment efforts continued to pay off with several investments announced, including one for 900 people at a new north Belfast e-business customer interaction centre, says the review. But this contrasts with continuing difficulties at Harland and Wolff.
These two developments highlight the structural changes taking place in the Northern Irish economy as many traditional industries continue to decline, the review adds.
On the negative side, events surrounding the stand-off at Drumcree did little to improve Northern Ireland's image and standing as an attractive investment location and will have harmed efforts to secure jobs from overseas, according to the review.
Nevertheless, when Northern Ireland's economic fundamentals are examined, a regional economy achieving ever-higher levels of economic activity emerges, said the review.
Perhaps the most favourable trends in the local economy are those for employment and unemployment, it said. The number of employed reached a record 623,000 in the first quarter of 2000, while unemployment, as measured by the claimant count, fell by 11,000 to 42,000 in the second quarter.
"While further growth in employment in the year ahead can be envisaged, self employment will fare less well," said the review. "The latest official data on Northern Ireland's GDP shows that income from self-employment declined in 1998, mainly due to the collapse in farm incomes."
Any significant recovery in self-employment income in the coming year is unlikely, it said.
A third important driver of the economy is the performance of the British economy where the outlook for the next 12 months is reasonably good. This is set to be mirrored in the North with around 3 per cent GDP growth this year, the review says.
