Projected 2023 output growth revised upwards, but the economic outlook remains challenging
The UK and Northern Ireland economies have displayed a degree of resilience so far this year and are both estimated to have expanded in the first quarter of 2023. Looking forward, the economic outlook remains challenging and uncertain given the persistence of inflationary pressures and the accompanying tightening in monetary policy. We are now forecasting that the Northern Ireland economy will grow by around 0.2% in 2023, an upward revision from our previous report. However, we have revised our projection for output growth in 2024 downwards and now expect the Northern Ireland economy to expand by about 0.6% next year as price pressures and the tighter policy environment weigh on growth.
The labour market in Northern Ireland has continued to perform relatively strongly despite the challenging economic backdrop. The latest Quarterly Employment Survey showed that the number of employee jobs increased by 0.6% in the first quarter of 2023, following growth of 0.7% and 0.9% in 2022 Q4 and 2022 Q3 respectively. Given this strong data, we now expect the annual average number of employee jobs to increase by around 1.6% in 2023. However, we expect the annual rate of jobs growth to slow to about 0.2% in 2024 as the challenging economic environment eventually leads to more modest rates of employment growth.