NI to 'fare better' in downturn

There were almost 15,000 more people unemployed by the end of 2008

Northern Ireland is to fare better than the rest of the UK during the economic downturn, a PricewaterhouseCoopers report has suggested.

The latest PwC UK and Northern Ireland Economic Outlook report forecast the NI economy would decline by 3% in 2009.

However, other regions of the UK, like the Midlands and the north of England, can expect contractions of up to 4%.

The level of unemployment in Northern Ireland is also the lowest of any of the regions of the United Kingdom.

This was despite the largest annual increase in unemployment since 1971, with the jobless total up by 7,400 in the final three months of the year and by 14,700 over the full year.

There are warnings, however, that the local economy could shrink further as the recession deepens and the banking crisis continues.

The report also suggested that although Northern Ireland average house prices fell by 28 per cent in 2008 - the worst slump since the 1980s - the end may be in sight.

PwC Chief Economist Philip McDonagh said Northern Ireland was going to "perform less worse rather than better than the rest of the UK".

"But because of our structure - with a large public sector - we are going to suffer less than other regions.

The house price to average earnings ratio is now down to around five from way over nine just last year and it still has a little bit to go we would suggest

Philip McDonagh, PwC

"We believe the contraction of the Northern Ireland economy will be something on the scale of 3% in the current year and will grow very little next year, so it is not good news for those people who will be losing jobs or getting into financial difficulties as a result of this recession."

Mr McDonagh added that there were "some reasons to be cheerful in the midst of all the gloom".

"We do have a lower Sterling/Euro exchange rate, a weaker Sterling, which is not good news for those of us who can afford to go on holiday but it is good news for the tourist trade because we're a lower cost destination.

"And of course property prices are coming down as well, house prices are coming down to more sensible and affordable levels.

"The house price to average earnings ratio is now down to around five from way over nine just last year and it still has a little bit to go we would suggest."

Meanwhile, Finance Minister Nigel Dodds has unveiled a new electronic tender system that it is hoped will encourage more local small and medium sized enterprises (SMEs) to avail of the �2.2bn per annum government procurement spend.

"This electronic tender system will maximise the visibility of all business opportunities and make it easier for companies, particularly SMEs to bid for work," said Mr Dodds.

"The ultimate goal is for all central government procurement opportunities to be managed through this single portal."