This came to mind on reading the latest depressing data from the Ulster Bank PMI survey about the state of the local economy. Private business sector business activity is down for the 10th month in a row with construction, retail and services all suffering while even more worryingly private sector employment is down for the 31st month in a row. The conclusion is that:
"...the local economy is in a much weaker state than any other UK region"
This places a highly significant question mark over the ability of the private sector to absorb any reduction in the public sector. Beyond the general economic difficulties and reliance on the public sector, the Northern Ireland economy has two further problems that differentiate it from other parts of the UK. First, the differential impact of the significant decline of the Irish economy. Second, the issue of the private sector's access to credit. The greater presence of Irish banks in our financial sector, who are taking an even bigger pasting than the UK banks, is interfering in our credit flow. While some attention is being given to the Treasury paper on growing the private sector, it is probably worth the effort to ensure the Banking reform paper also addresses this particular circumstance of Northern Ireland.
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