Over 130 senior business leaders attended the CBI Annual Economic Briefing on 6 June at the Hilton Hotel Belfast, which includes insights from Stephen Gifford, CBI Director of Economics and Alan Bridle, UK Economist & Market Analyst for Bank of Ireland UK, reports Business First.
Commenting on the UK and international global economy in 2013, Stephen Gifford said: “2013 has seen a subdued start for the global economy but we expect activity to improve in the latter part of the year.
“US private sector recovery is set to strengthen and Eurozone growth to resume gradually from Q2, mainly due to the strength of the German economy. Growth is likely to strengthen modestly in the emerging markets too.”
He added, “that the European outlook is very poor with the Eurozone experiencing 0.2% decline in GDP in Q1 2013 – the sixth in a row; four of the Eurozone’s five largest economies remained in recession (France, Italy, Spain, Netherlands); and unemployment is still climbing at 12.1% in March 2013.
“The UK economy will experience muted growth in 2013. However, business surveys suggest that underlying conditions are starting to improve, and expectations for the next three months are positive within manufacturing and services. CBI predicts GDP growth of 1.0% in 2013 and 2.0% in 2014. In 2014, growth, expected to broaden further, with a stronger investment and household contribution.”
Mr. Gifford said, “Businesses remain particularly concerned about the headwinds from the financial crisis legacies, fiscal consolidation, and subdued growth in advanced economies.”
Alan Bridle, UK Economist & Market Analyst for Bank of Ireland UK said: “At the macro level there are signs of stability and a return to modest growth, led by the service sector and recent job announcements have been positive. However, Northern Ireland is still dealing with its economic past and identified the “dragging anchors” for the local economy:“Research suggests a higher incidence of “interest-only” borrowings in the region keeping some afloat (so called “zombie debtor” phenomenon). While overall demand for credit is muted, there is some evidence that trading business with property debts are 4 times more likely to have sought bank finance since 2012;
“The monetary value of the region’s housing market activity has plummeted by over 80% since 2007 although more encouragingly, transactions are rising again;
“Job insecurity remains elevated with 1 in 5 people expressing concern about being made redundant in Northern Ireland while confidence in both the economy and people’s personal financial circumstances remains below pre-crisis levels.”
Mr Bridle indicated the short-term picture will remain challenging.
“While subsets of the private sector and individual businesses continue to perform well, especially those not reliant on domestic spending, the 2013/14 outlook for growth for the region is broadly flat and subject to wider UK and Irish developments.”