MenuSections Close An anti-protocol sign Angela Keery, head of tax at Baker Tilly Mooney Moore / John Breslin
The NI Protocol has helped the region to slightly outperform the UK average economically, but the benefits will be temporary without more investment, a report has said. But the report also reveals a much “grimmer picture” of previously reported employment numbers in Northern Ireland, which are expected to remain below pre-pandemic levels well into 2023. While the overall output of goods and service “slightly outperformed” the UK average, Northern Ireland’s employment growth falls far below, according to the National Institute for Economic and Social Research (NIESR) report, part of a study of the UK economy. Overall, the authors forecast the UK economy entering a recession in the third quarter of this year and remaining there until the first quarter of 2023. Inflation is forecast to peak close to 11% in the fourth quarter but drop back to 3% a year later. The NIESR report said: “The NI Protocol helped Northern Ireland attain higher GVA growth than if there was no deal in place. “Nevertheless, these gains in growth are mostly temporary and without more investment in the region, the rest of the UK will overtake Northern Ireland in GVA performance. “While this paints a picture of Northern Ireland as a beneficiary of being in the EU’s single market and customs union, one must not lose sight of its performance compared to other booming regions of the UK.” Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning
This field is required Post-pandemic growth in London and the South-East is almost four times that of Northern Ireland, the report said. It added: “As such the NI Protocol should be viewed as a temporary boost driven by the trading sector, but to convert this into long-term success, policymakers have to focus on increasing productivity.” The report does not directly address or try and forecast the impact of the legislation over-riding many elements of the protocol, currently passing through the Houses of Parliament. Angela Keery, head of tax at Baker Tilly Mooney Moore, said the report is “welcome evidence of the positive impact the arrangement is having in many sectors”.
Close Angela Keery, head of tax at Baker Tilly Mooney Moore /
It is “testament to the drive and ability of our business owners who are adapting to the circumstances, taking advantages where they can find them, and continuing to get the job done”, Ms Keery added. But she added: “The overall uncertainty caused by the NI Protocol negotiations is dampening any opportunities offered up by dual-market access, and we are ultimately missing a window of opportunity. “Perhaps even more concerning is the lack of economic forecasts around what will happen if moves are made to override the protocol at this stage. “Surely, after over 19 months of learning to work under the current arrangement, any significant withdrawal has the potential to have very detrimental effects on the economy.” In a study included within the report, Queen’s University economist David Jordan issued a warning over lack of productivity here will hamper future growth.
While discussion of the economy has focused on the pandemic and the rising cost of living, alongside the protocol, these issues “have obscured the importance of Northern Ireland’s persistent problem of low productivity”. It is 17% below the UK average. Underinvestment in R&D remains a persistent weakness, while the area’s infrastructure is poor compared to other regions and nations, Prof Jordan writes. Otherwise, the region continues to have the worst employment profile of the UK nations and regions. Labour Force revisions “paint a much grimmer picture of Northern Ireland’s employment during the Covid-19 period”. The numbers employed dropped by 7%, more than the previously reported 5%, and will still be 3% below quarter four of 2019 well into 2023. Belfasttelegraph