Forecasts revised upwards but Northern Ireland economy still expected to contract in 2023
The UK economy grew by 0.1% in the fourth quarter of 2022 and in Northern Ireland, the economy is also estimated to have expanded in the final quarter of last year. Looking forward, the economic outlook remains challenging as high inflation and changes to the economic policy environment are continuing to impact economic performance. However, the economy has proved more resilient than previously anticipated and the labour market remains in a relatively robust position. The economic outlook remains highly uncertain and, while we still expect annual economic output to decline this year, we have revised our forecasts upwards. We are now forecasting that the Northern Ireland economy will contract by around 0.3% in 2023 but grow by about 0.9% in 2024.
Despite the challenging economic backdrop, the labour market in Northern Ireland has remained relatively robust. In 2022, the average number of employee jobs increased by 3.6% but we expect the rate of jobs growth to slow sharply this year. We are projecting that the annual average number of employee jobs will increase by around 0.2% in 2023 and by about 0.3% in 2024. We are also forecasting that the unemployment rate in Northern Ireland will average around 3.2% in 2023, before increasing to an annual average of about 3.5% in 2024.