Economic growth projections for 2024 revised slightly downwards but pace of growth expected to pick up in 2025
Economic growth in the UK slowed in the third quarter of the year, with the rate of expansion falling from 0.5% in quarter two to 0.1% in quarter three. We think that the Northern Ireland economy is likely to have grown again in the third quarter of the year but expect growth in both Northern Ireland and the wider UK to be softer in the second half of this year than it was in the first half of 2024. Looking forward, closer to target inflation and the projected further loosening of monetary policy are expected to support consumer spending but there are still likely to be some challenges that could weigh on economic growth. We are forecasting that the Northern Ireland economy will grow by around 1.1% this year and by about 1.4% in 2025.
The labour market in Northern Ireland is in a relatively strong position with low unemployment but showing some signs of a modest softening in jobs growth. The rate of growth in employee jobs slowed from 0.5% in 2024 Q1 to 0.2% in the second quarter of the year. In addition, the year-on-year growth rate of the number of payrolled employees was 1.1% in October 2024, the lowest since May 2021. We are projecting that the growth rate of the annual average number of employee jobs will slow to around 0.9% this year then about 0.8% next year. We are also forecasting that the unemployment rate in Northern Ireland will average around 2.1% in 2024 then rise to an average of about 2.5% in 2025.
Read the 2024 Q4 Quarterly Sectoral Forecasts report here
