Economy of Northern Ireland

Economy of Northern Ireland

Belfast City Centre
Currency	Pound sterling (GBP£)
Trade organisations	WTO, OECD
Statistics
GDP	£46 billion (nominal) / £40.8 billion (PPP)[1]
GDP growth	-0.3% (Q2 2018)[2]
GDP per capita	£24,900 (nominal) / £23,200 (PPP)[citation needed]
Inflation (CPI)	-0.1% (Nov 2015)
Millionaires (US$)	14,000 (£)[3]
Labour force	897,000 (Jan 2016)[4]
Unemployment	5.7% (Jan 2016)
Average gross salary	£2,295 / €2,665 / $3,132 (monthly)
Main industries	Services, construction, agriculture, public sector
Ease-of-doing-business rank	7th (UK)(2017)[5]
External
Exports	£6.327 billion (2015)[6]
Export goods	show List Machinery & transport equipment Food & live animals Chemicals & related products Manufactured articles Manufactured goods [4]
Main export partners	EU total (54.7%)  Ireland (33.4%)  United States (17.6%)  Canada (5.8%)  Germany (5.3%)  France (4.8%)
Imports	£6.078 billion (2015)[6]
Import goods	show List Manufactured articles Food & live animals Chemicals & related products Machinery & transport equipment Manufactured goods [4]
Main import partners	EU total (55.1%)  Ireland (27.2%)  China (16.5%)  United States (8.2%)  Germany (6.1%)  Netherlands (5.7%)
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars.

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The economy of Northern Ireland is the smallest of the four constituents of the United Kingdom. Northern Ireland previously had a traditionally industrial economy, most notably in shipbuilding, rope manufacture and textiles, but most heavy industry has since been replaced by services.

Overview[]

Output and economic growth[]

Northern Ireland has the smallest economy of any of the twelve NUTS 1 regions of the United Kingdom, at £27.4bn (€37.8bn).^[when?] However, this is partly because Northern Ireland has the smallest population; at £15,200 (€21,000) Northern Ireland has a greater GDP per capita than both North East England and Wales.^{[citation needed]}

Rural areas including the North West are particularly deprived. It suffers from the highest unemployment and highest poverty rates in Northern Ireland.

Throughout the 1990s, the Northern Irish economy grew faster than the rest of the UK, due in part to the rapid growth of the economy of the Republic of Ireland and the so-called "peace dividend". An April 2007 survey found Northern Ireland's average house price to one of the highest in the UK, behind London, the South East and the South West. It also found Northern Ireland to have all of the top ten property "hot spots", with the Craigavon and Newtownards areas increasing by 55%.^[7] However, as of 2018 Northern Ireland house prices are the lowest on average in the UK approx 40% lower than before the bubble burst in 2008

Employment[]

Unemployment in Northern Ireland has decreased substantially in recent years, and is now roughly at 6.1%, down from a peak of 17.2% in 1986.^[8][9] Youth unemployment and long-term unemployment have fallen most quickly. Working-age economic inactivity is 28%, which is the highest of any UK region.^[10]

Northern Ireland's macroeconomy is also characterised by considerably longer actual working hours and lower gender income disparity than in the United Kingdom as a whole.^[10]

Investment[]

Foreign direct investment was restrained by The Troubles.^{[citation needed]} Since the signing of the Good Friday Agreement, investment in Northern Ireland has increased significantly.^{[citation needed]} Most investment has been focused in Greater Belfast and to a lesser extent Greater Derry. Major projects include the Victoria Square Shopping Centre Belfast City Centre. Titanic Quarter is a waterfront development under construction.^[11] The Laganside Corporation was previously at the forefront of the redevelopment along the banks of the River Lagan. The Cathedral Quarter has also seen substantial investment. In Derry, the ILEX Urban Regeneration Company no longer exists. The area is 12th in terms of funding despite it being the second city.^{[citation needed]}

Agriculture[]

Agriculture in Northern Ireland is heavily mechanised. In 2000, agriculture accounted for 2.4% of economic output in Northern Ireland, compared to 1% in the United Kingdom as a whole.^[12] As in the rest of the United Kingdom, livestock and dairy account for the majority of agricultural output. The main crops are potatoes, barley, and wheat.

Manufacturing[]

Heavy industry is concentrated in and around Belfast, although other major towns and cities also have heavy manufacturing areas. Machinery and equipment manufacturing, food processing, textile and electronics manufacturing are the leading industries. Other industries such as papermaking, furniture manufacturing, aerospace and shipbuilding are also important, concentrated mostly in the eastern parts of Northern Ireland.

Although its share of economic output has declined, manufacturing output in Northern Ireland has remained almost unchanged over the past five years,^[when?] after a period of steep manufacturing growth between 1998 and 2001.^[13] However, this overall picture of health hides a shift in manufacturing priorities, with the decline of traditional industries, such as textiles and shipbuilding, at the expense of high tech and capital-intensive industries. In 2005, chemicals and engineering were the only two manufacturing sub-sectors to record growth, whilst output of textiles fell by 18%.^[14]

Engineering is the largest manufacturing sub-sector in Northern Ireland, particularly in the fields of aerospace and heavy machinery. Spirit Aerosystems is the province's largest industrial employer, with 5,400 workers at five sites in the Greater Belfast area.^{[citation needed]} Other major engineering employers in Northern Ireland include Caterpillar, Emerson Electric, Fujitsu, Allstate NI, Seagate and NACCO.^{[needs update]} Many of these enjoy close academic and business links with Queen's University Belfast and Ulster University. The former ranks as one of the best British universities for all engineering courses.^[15]

Harland and Wolff, which in the early 20th century was the world's biggest shipbuilder, suffered from intense international competition during the 1970s and 1980s and declined rapidly. During the 1990s the company diversified into civil engineering and industrial fabrication, manufacturing bridges and oil platforms. The vast works on Queen's Island were downsized, with much of the land (including the slipway where RMS Titanic was built) sold off for redevelopment in the 2000s as the Titanic Quarter. The modern, smaller yard employs only 800 people. H&W has not built a ship since 2003, but has seen workload increase through shipbreaking, ship repair and maintenance and conversion work. The company has also been active in the design and construction of offshore power generation equipment- both wind turbines and wave-action turbines.

Services[]

Services account for almost 70% of economic output, and 78% of employees.^{[citation needed][needs update]}

Effects of the COVID-19 pandemic[]

The economy of Northern Ireland was negatively impacted by the lockdowns and travel restrictions necessitated by the COVID-19 pandemic. The tourism and hospitality industry was particularly hard hit. These sectors "have been mandated to close since 26 December 2020, with a very limited number of exceptions" and many restrictions were continuing into April 2021.^[16] Hotels and other accommodations, for example, "closed apart from only for work-related stays".^[17] Restaurants and pubs were restricted to take-away service. In February, the government said it would not consider "reopening hospitality before mid-summer".^[18]

In late March, owners and operators of many types of businesses signed a petition "calling for the economy to reopen" and requested a "proper timetable plan" for rebuilding the economy. The content also discussed the "catastrophe" that the lockdowns and restrictions had created.^[19] Government assistance was available; the £25,000 Retail, Hospitality, Tourism and Leisure Grant was closed by 25 March 2021 but "a further payment" was to be made to eligible businesses. An industry news report stated that it would soon publish a report: "£177 million in new grants to support Northern Ireland businesses".^[20]

Some restrictions were expected to be loosened in mid April but tourism was expected to remain very limited.^[21] One news item stated that NI was emphasizing "stay local" and no date was provided as to when accommodations could reopen.^[22] Anyone entering NI and planning to stay for a day or longer was required to "self-isolate for 10 days"; this did not apply to those on "essential" trips. Everyone entering NI was required to provide "evidence of a negative Covid-19 test".^[23]

Public sector[]

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As of December 2008 the public sector in Northern Ireland accounted for 30.8% of the total workforce; this is significantly higher than the overall UK figure.^{[citation needed]} Overall, the figure for Northern Ireland has fallen. In 1992 the public sector accounted for 37% of the workforce.

In total in 2006, the British government subvention totalled £5,000m, or 20% of Northern Ireland's economic output.^[24] This had risen to £11,547m in 2009–10 during the "Great Recession", and then fell back to £9,160m in 2013–14.^[25] A 2017 article by a research professor at the Economic and Social Research Institute quantified the transfers at 10.8 billion Euro annually.^[26] In late 2018 The Irish Times estimated that the subvention had risen to £10.8 billion, about a quarter of Northern Ireland's GDP.^[27]

Currency[]

The official currency in use in Northern Ireland is the British pound sterling. Although the euro, in use in the Republic of Ireland, is accepted by retailing chains closer to the border with the Republic of Ireland.

In addition, four Northern Irish banks retain the right to print their own sterling-denominated banknotes: Bank of Ireland, First Trust Bank, Northern Bank, and Ulster Bank. The central bank of the UK as a whole is the Bank of England.

Energy[]

Northern Ireland's total primary energy consumption is approximately 4.90 million tonnes of oil equivalent. The vast majority of this energy comes from fossil fuels.

Energy policy in the province is set by the Department for the Economy.

Primary energy consumption
Source	ktoe	%
Coal	1,440	29.4
Oil & LPG	1,290	26.3
Natural Gas	1,100	22.4
Vehicle fuel	926	18.9
Renewables	10	0.2
Electricity imports	140	2.8
Total	4,900	100

Electricity[]

Northern Ireland's electrical grid is operated by (SONI) and the distribution is managed by Northern Ireland Electricity (NIE) which owns and manages the infrastructure which connects over 850,000 customers. Electricity consumption in Northern Ireland was 7,867 GW·h in 2002/3.^[28] At 4.6 MW·h per person, this is 18% less than that of the rest of the United Kingdom (5.6 MW·h per person).^[when?] There are three main power stations in Northern Ireland they are Ballylumford & Kilroot power stations located in Co Antrim and are operated by [EP UK Investments]. There is also Coolkeeragh power station in Co Londonderry. The electricity grid throughout all of Ireland is operated as a single system, with separate control centers in Dublin and Belfast.

Northern Ireland's electrical grid is connected to that of the Republic of Ireland by three cross-border interconnectors. The main interconnector, between Tandragee and Louth has a capacity of 1,200 MW. Two back-up interconnectors have a combined capacity of 240 MW. This combined all-island grid is connected to the National Grid on the island of Great Britain by the 500 MW Moyle interconnector, under the North Channel.^[29]

Gas[]

Gas for the Greater Belfast area is supplied via the Scotland-Northern Ireland pipeline (SNIP), a 24-inch-diameter (610 mm) interconnector. SSE Airtricity and firmus energy supply gas to the Greater Belfast area via Phoenix Natural Gas' network.

In the other areas of Northern Ireland, specifically towards Derry City, gas comes from two interconnector pipelines, one being supplied by the Republic's gas supplier, Bord Gáis. The North-West pipeline from Carrickfergus in County Antrim to Derry opened in November 2004, and the south–north pipeline from Gormanston (in the Republic) to Antrim was opened in October 2006. The complete south–north pipeline to Dublin opened in November 2007, passing Armagh, Banbridge, Craigavon and Newry. Since December 2005, Bord Gáis has supplied gas to residential customers in this area under the name firmus energy.

Transport[]

Northern Ireland has a total of 24,820 km (15,420 mi) of roads, or 1 km for each 68 people (1 mi for each 109 people), which is considerably more than in the United Kingdom as a whole (1 km per 162 people).^[30] There are seven motorways in Northern Ireland, extending radially from Belfast, and connecting that city to Antrim, Dungannon, Lisburn, Newtownabbey, and Portadown.

Northern Ireland Railways (NIR) runs passenger trains and presently carries no freight though it is possible to carry freight. NIR is owned by the people of Northern Ireland and has embarked upon significant investment on the Belfast-Derry railway line to upgrade the infrastructure between Belfast and Derry the largest cities in Northern Ireland. NIR connects Belfast Great Victoria Street and Lanyon Place to Antrim, Ballymena, Coleraine, Portrush, Derry along the Northern Corridor and the Belfast Suburban Rail network serves places near Belfast, along with the Enterprise (train service) connecting Lisburn, Portadown, Newry and across the border along the Dublin-Belfast railway line to Dublin Connolly.

Northern Ireland has three civilian airports: Belfast City, Belfast International, and City of Derry. Only Belfast City Airport is served by train, from Sydenham station on the Bangor Line.

Major seaports in Northern Ireland include the Port of Belfast, the Derry Port and the Port of Larne. The Port of Belfast is one of the chief ports of the United Kingdom, handling 17 million tonnes (16.7 million long tons) of goods in 2005^{[31][needs update]}

In addition to these existing links, several organisations have proposed a tunnel under the North Channel, with one possible site connecting the eastern part of Northern Ireland to Wigtownshire. The idea has been given technical consideration since the 19th century, but, as of 2012, no major political party has advocated such a link, due to financial constraints.

Data[]

The Northern Ireland Statistics and Research Agency (NISRA) is the principal source of official statistics on Northern Ireland. These statistics and research inform public policy and associated debate in the wider society. NISRA is an Agency of the Department of Finance and Personnel.^[32]

Alongside official national statistics a number of respected private sector surveys are used to understand how the economy is performing. These include the British Chambers of Commerce Quarterly Economic Survey.^[33] This survey has information on the performance of Northern Irish businesses since 1989.

Regional Disparity / North-South Divide[]

According to Eurostat figures there are huge regional disparities in the UK with GDP per capita ranging from £11,000 (€15,000) in West Wales to £130,450 (€179,800) in Inner-London West. There are 26 areas in the UK where the GDP per person is under £14,500 (€20,000).^[34]

These areas are the following:

1.1 million (60% of Northern Irish) live in these deprived Northern Irish districts. 3 of these in Northern Ireland: Outer Belfast, North of Northern Ireland, West & South of Northern Ireland.

See also[]

• Economy of the Republic of Ireland
• Countries of the United Kingdom by GDP per capita

References[]

External links[]

Northern Ireland Executive departments responsible for economic policy:

• Department for the Economy - oversees Invest Northern Ireland and Tourism Northern Ireland
• Department of Finance
• Department for Infrastructure
• Department of Agriculture, Environment and Rural Affairs