Economic growth projections for Northern Ireland revised upwards after a relatively strong first part of the year
The UK economy continued to expand in the second quarter of 2024, and we think that output in Northern Ireland is also likely to have increased over the same period. Lower inflation and the robustness of the labour market likely supported economic growth. In response to the lower rate of price rises, Bank of England Bank Rate was reduced in August and we expect the monetary policy environment to continue to gradually loosen, further supporting household spending and business investment. Looking ahead, we expect the economy to grow at broadly similar annual rates this year and next as the pressure on consumer spending power continues to gradually ease. We are forecasting that the Northern Ireland economy will grow by around 1.2% this year, an upward revision from our last report. We then expect economic output to increase by about 1.3% in 2025.
The Northern Ireland labour market continues to show a degree of resilience. The number of employee jobs increased in the first quarter of the year, and the HMRC Pay As You Earn data showed a slight monthly increase in the number of payrolled employees in July. However, there are some signs that the labour market may soften in the future with the employment rate declining in quarter two and confirmed redundancies in the year to July 2024 being just under double that for the previous twelve months. We are projecting that the growth rate of the annual average number of employee jobs will slow to around 0.9% this year then remain at a similar rate of growth in 2025.
Read the 2024 Q3 Quarterly Sectoral Forecasts report here
