Insight Series: Northern Ireland Market Report 2017

Northern Ireland was hit particularly hard by the 2008 financial crisis. Generally speaking, the country is less wealthy than the UK as a whole, and its economic fortunes tend to lag behind the regional trend. It was therefore particularly unfortunate that the financial crash arrived just when Northern Ireland was experiencing a growth spurt unrivalled on the British mainland.

The property market most clearly illustrates the impact of the crisis. The crash and ensuing recession cut short the strongest rally house prices had seen in decades, and from its meteoric rise the market only had further to fall. Rampant negative equity wounded the confidence of home buyers and investors alike, further delaying the eventual recovery of the market until 2013.

Northern Ireland s economy is still around 7.3% smaller than it was before the 2008 crisis, according to Ulster University, but it is now officially in growth mode. The latest results from the Northern Ireland Composite Economic Index show that economic activity in Northern Ireland increased by 1.0% between Q1 and Q2 2016, compared to just 0.7% for the UK as a whole. Northern Ireland s economic output is also performing better than the UK average, according to the Department for the Economy s Index of Services. Output increased by 1.7% in from April to June 2016, compared with 0.5% for the entire UK. Labour Force Survey figures from August 2016 show that Northern Ireland s unemployment rate fell to 5.5%, the lowest level since November 2008.

The effects of the revived economy have been trickling down to consumers in the past few years. Pay-packets are feeling a distinct difference, with median gross weekly earnings for full-time employees increasing by 5.4%

from April 2014 to April 2015, and a further 2.2% to April 2016 (Department for the Economy). Rising wages have inspired consumer confidence, resulting in increased spending that has in turn driven further economic growth.

NORTHERN IRELAND S ECONOMY: CRISIS AND RECOVERY02

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Average UK House Prices Source: ONS

Scotland Wales England Northern Ireland