“a strong performance.. despite frequently difficult trading conditions”

According to the provisional statistics on the NI economy in 2004, contained in this Northern Ireland Annual Business Inquiry report[pdf file] – “In 2004 the total value of sales and work completed (Turnover) by Northern Ireland based companies and organisations was £45,228 million, an increase of 5.9% on the figure for 2003 at basic prices (i.e. without adjustment for factors such as inflation).” The report excludes the central government public sector. The Press Association got some quotes from NIO Minister Angela Smith.. although the DETI website has only the briefest mention of the report.. Has Peter Hain seen this?Other headline figures –

• In 2004 the total value of sales and work completed (Turnover) by Northern Ireland based companies and organisations was £45,228 million, an increase of 5.9% on the figure for 2003 at basic prices1 (i.e. without adjustment for factors such as inflation).

• The total value of businesses’ income once expenditure on external goods and services has been accounted for was £13,556 million at basic prices (approximate Gross Value Added (GVA)), an increase of 6.4% on the figure for 2003.

• The Service sector accounted for some 57.7% of GVA in organisations covered by the survey and was worth £7,820 million in 2004, up £761 million (10.8%) on 2003.

• Manufacturing GVA increased by £110 million (3.0%) compared to the previous year and was worth £3,780 million in 2004 (27.9% of GVA).

• Payments for employees accounted for some 52.8% of Gross Value Added and were worth £7,154 million within the economy, an increase of 6.0% from 2003.

From the PA report

Enterprise Minister Angela Smith, welcoming the figures, said: “The value of Northern Ireland business GVA was £13.6bn in 20004, an increase of some 6.4% over the year.

“This is a strong performance and shows the potential the private sector has to grow the Northern Ireland economy, despite frequently difficult trading conditions.”

  • Brian Boru

    Misleading as most of the consumption comes from the moribund state-sector which accounts for 63% of the Northern workforce. NI will never catch up with the South while its economy is dependent on desk-clerkery. The Brits need to reduce the role of the civil-service and stimulate a private-sector-driven economy which was the key to the 7 fold increase in the South’s GDP since 1985.

  • seabhac siulach

    The rampant Southern economy is lifting all boats on the island, including those North of that borderline.

    What are the percentages? Is it 60% of the North’s exports are to the South of Ireland (or something like that)…so no wonder times in the 6 county business world are good…

    In addition, the South is absorbing 11,000 immigrants per month(!) with no significant increase in unemployment. Part of this amazingly bouyant employment market is to provide an avenue for the North’s unemployed to head South. This, in part, is also responsible for the artificially rosy economic picture in the 6 counties.
    Doesn’t the 6 counties have the lowest unemployment in the UK? Wonder why…?

  • Pete Baker

    “most of the consumption comes from the moribund state-sector which accounts for 63% of the Northern workforce.”

    Brian B

    perhaps you could tell us how you arrived at that particular figure.. of 63%?

  • Crataegus

    The figures show promise, but let’s not live in a fools paradise, we are starting from a low base and the buoyant Southern economy does help provide opportunity, but so does anywhere.

    When Angela Smith says, “This is a strong performance and shows the potential the private sector has to grow the Northern Ireland economy, despite frequently difficult trading conditions,” doubtless she was referring to the local political situation and not the brakes her own government has imposed.

    The biggest problem we have now is the British economic and tax framework. Unlike Britain we have a land border with another EU state and we are in direct competition with it. If it is cheaper to set up a business in the South why would anyone locate in the North unless you were a retailer or similar wanting to suck resources out? If petrol is cheaper in the South our border petrol stations close, same applies to other goods, if business costs are more we can’t compete and can’t reinvest.

    Every time we cross the border and change money it costs because of this daft attachment to sterling. We have higher interest rates, higher business taxes, punitive rating systems, appalling levels of state restriction and control. We also need to have a look at training and education and what sectors we wish to target and how we encourage those sectors.

    If the larger economies in the EU start to adopt the same tax structures as the Republic how long will the Celtic Tiger last?

  • George

    Pete,

    “Some 62 per cent of gross domestic product is accounted for by public spending. Roughly a third of those in work are employed in the public sector.”
    Financial Times, August 31, 2004:

    “The North’s public sector accounts for over 60 per cent of its economy. The comparative figure for the South is 35 per cent”
    Marc Colman, Irish Times, August 5, 2005

    “But über-Dependency Britain Northern Ireland exceeds them all: public spending has now reached a fantastical 64% of GDP in Northern Ireland, the kind of number associated with a miserable People’s Republic of the 1970s.”
    The Business Online, October 2005

    “We must move away from the situation where 32 per cent of all employees in Northern Ireland are from the public sector and expand our private sector”.
    Federation of Small Businesses (FSB), October 2004

    On the positive side, proof if proof was needed that you can make money even in the most difficult of circumstances.

    While Northern Ireland has one of the lowest entrepeneurial rates in the UK it has the highest survival rate for startups.

    Could be proof that state contracts are always paid, who knows.

    On the negative side, the bottom line is all that matters in business and over 60% of Northern Ireland’s GDP is generated via the public sector.

  • Pete Baker

    Thank you, George, but the claim made was that the state sector “accounts for 63% of the Northern workforce”.

  • George

    Pete,
    an outrageous claim, who could purport such a thing. It’s a mere 30-odd %.

    One of the issues for the NI economy from a political rather than economic point of view (can you do that?) is that it has earned quite a bit out of the growth of the Republic’s economy.

    The southern economy used to be totally dependent on the British one 80 years ago and has year by year slowly weaned itself off.

    The NI graph is probably going in the opposite direction if you strip out the public sector stuff and just look solely at the private sector. Even now, it would feel an awful chill if not a desperate cold if the south went into recession.

    This is where Hain is coming from. Economics is about money and the money in the future is in Northern Ireland being a fully integrated part of the island economy. Lean, mean and fighting fit.

    The question is can Northern Ireland survive as a fully integrated part of the union at the same time? Can those two ponies be ridden at the same time.

    I don’t know but the current unionist leadership doesn’t seem to be addressing that issue.

  • Crataegus

    George

    Can those two ponies be ridden at the same time. I don’t know but the current unionist leadership doesn’t seem to be addressing that issue.

    I agree and I cannot see how it can be done without radical change to the powers devolved. This would be to the benefit of Nationalists and Unionists and would help alter perceptions of the various relationships

  • mnob

    George,

    Articles and editorials are not proof. It may surprise you but journalists have bias. The only provable statistics in your summaries are that 35% of people employed in NI work in the public sector. That figure is higher than in GB and the ROI and is generally acknowledged to be unhealthy.

    I would encourage those who wish to express an opinion to check out the actual reports referenced in this and the Quarterly Workforce Survey thread.

    But as usual we have a thread talking about one thing (economic activity) hijacked by those who would rather talk about politics.

  • seabhac siulach

    mnob:
    “But as usual we have a thread talking about one thing (economic activity) hijacked by those who would rather talk about politics.”

    Yes, but surely the relative weakness of the Northern economy vis-a-vis the Southern one is relevant, purely on an economic basis. Not sure why this is necessarily ‘political’.

    I am not sure you can really separate the two things, in fact, in reality.

    For example, if economics is not political then surely Unionists should have nothing against all-Ireland economic harmonisation/integration…solely in the interest of improving the efficiencies on both sides of the border, e.g., electricity, etc.? That would be the logical approach.

    However, Hain’s suggestions on the same point led to furious Unionist (DUP) reaction, suggesting at once that economics is indeed closely linked to politics. After all, the one that has the fingers (well, most of them) on the purse strings can always call the political shots…

    In any case, the summary is that the 6 counties is increasingly economically dependent on the 26 counties. This will have political repercussions sooner or later. Hain, I think, was taking the first steps in pointing out the economic and political reality of this (which is something, I know, Unionism traditionally has trouble dealing with).

  • Brian Boru

    Pete Baker, I was probably mixing it up with the GDP apologies.

  • George

    Mnob,
    I’d believe the Financial Times on this simply because the authorities haven’t come out and rubbished them.

    Has anyone from the NIO come out and said it isn’t over 60%? Anyone at all? Not that I know of.

    If you or anyone else can produce official figures that show they are making this up, I’ll gladly accept them.

    Until then, I’ll stick with the FT.