THE NORTH’S economy will contract by 1 per cent and unemployment will rise at the rate of 1,000 a month throughout 2009, according to a Bank of Ireland report published yesterday.
The report forecasts that the jobless total will rise from 34,000 to 50,000, representing 6 per cent of the workforce.
This follows a prediction made by Employment Minister Sir Reg Empey last Friday, when he said that up to 20,000 jobs could be lost in 2009.
The forecast follows a series of job loss announcements across Northern Ireland.
In 2008, the economy grew by less than 1 per cent after a sharp downturn in the last quarter of the year, while November saw the highest monthly rise in unemployment claims for 28 years.
The bank’s head of economics and research, Alan Bridle, was not entirely negative, however, suggesting the current difficulties provided an opportunity to “reconfigure” the local economy.
He also said 2010 could see a modest recovery as the North was better placed than Britain and the Republic to survive the recession.
However, he warned that “the inevitable long-term squeeze on UK fiscal policy will have potentially significant medium-term implications for the resources available to the Stormont Executive”.
This coincides with an Assembly debate yesterday on a DUP-backed Private Member’s Bill advocating that the number of Stormont departments be cut from 11 to six, in order that public spending be directed toward frontline services.
The report emphasised the downturn’s effect upon the business, legal and property sectors, as well as manufacturing and construction. This “new dimension” was brought about by the North’s “self-made property shock”.
Mr Bridle predicted that 2009 would also see deflation and interest rates close to zero, finishing the year at around 1 per cent.
He suggested the downturn presented an opportunity to reconfigure the economy more towards the private sector, with less emphasis on the property and construction sectors, with the challenge for the Executive being to alleviate the immediate effects of the recession while concentrating on boosting competitiveness and reform of the public sector.
