Sluggish recovery ahead with momentum picking up in 2012
At the annual CBI Northern Ireland Economic Briefing today (Wednesday) sponsored by Bank of Ireland, CBI’s Chief Economic Adviser, Ian McCafferty, emphasised that UK economic growth will remain sluggish but pick up momentum in 2012.
Mr McCafferty was speaking to an audience of over 150 business people at the Dunadry Hotel and Country Club, at an event sponsored by Bank of Ireland. He said “We expect GDP growth rate of 1.7% in 2011 and growth of 2.2% for 2012 for the UK economy. The economy is battling headwinds of squeezed household budgets, weak wage growth, high inflation, and necessary public spending cuts. Concerns also remain over the volatility of oil prices, and the impact of the earthquake in Japan on UK supply chains.”
However he emphasised that the CBI saw a number of brighter spots within the forecast. “Global economic conditions remain upbeat, and we expect to see a stronger performance by UK exporters. Business investment will also make a firm contribution to growth in 2011 and 2012.”
Alan Bridle, Bank of Ireland UK Economist, suggested that the outlook for the local economy in the next 12 months would continue to be influenced by the lengthy process and pace of balance sheet repair being undertaken by the financial, business and household sectors which will inevitably act as a “drag” on private spending and investment.
He said “In a macro sense the regional economy is currently bumping along the bottom with the prospects for a modest recovery over the next few years. But for some this will feel at least as painful as recession against a backdrop of higher inflation and public spending, tax and welfare reforms. Net job creation will be a real challenge.”
Mr Bridle concluded “Northern Irelandhas clearly suffered a decline in confidence levels that can be traced back to the general election with its clouds of an impending budget squeeze. However, on a positive theme, I believe some of the speculation about the scale of potential public sector downsizing is both exaggerated and unhelpful. There are subsets within the private sector that are expanding and continue to outperform, particularly in agrifood and manufacturing exports.”
Along with sponsoring CBI Economic Briefing for the fourth consecutive year, Bank of Ireland formally launched “Enterprise Week” in NI and RoI on Friday 20 May 2011, to illustrate their continuing support for businesses in the local community.
The week will feature a series of events across NI and RoI, including topics such as Women in Business, Agriculture, Exporting and Managing your Business in the current challenging environment.The week-long programme is open to both customers and non-customers, with over 1,600 businesses will display their products, ranging from fashion to food in their local Bank of Ireland Branches.
Ian McCafferty will be available for interview – please contact CBI Northern Ireland Director, Nigel Smyth on 077 1350 5806 to arrange.
Alan Bridle will also be available – please contact Sharon McDonnell on +353 76 6234784 / M: +353 87 2269324 to arrange an interview.