OUTLOOK SPRING 2016: A Year of Major Change · 2015-2025 (Selected Sectors) ... Manufacturing +4000...
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2016-17 2017-18 2018-19 2019-20 % change 2016-20 9,745 9,821 9,828 9,854 1% OPERATING SPEND (1) 1,010 1,036 1,073 1,126 11% CAPITAL SPENDING (2) CHANGING FACE OF AUSTERITY 2015 Spending Review - Northern Ireland Outcome (Cash Terms) Source: NI Budget 2016-17 Note 1: Non-Ring Fenced Resource DEL Note 2: Capital DEL (excludes Financial Transactions Capital) £m IMPACT OF CORPORATION TAX DEVOLUTION NORTHERN IRELAND EMPLOYMENT FORECAST 2015-2025 (Selected Sectors) Forecast is for approx. 40,000 new jobs over the next 10 years building on approximately 45,000 net new jobs 2012-2015. Agriculture +200 Manufacturing +4000 Construction +4400 Retail +1900 Transportation +3300 Public Admin & Defence -6500 Education -1500 Health & Social Work +3400 Arts & Entertainment +4000 Info & Comms +4400 Accommodation +3900 Profess & Sci +8500 Admin Services +8100 Source: UUEPC NORTHERN IRELAND GVA SECTORAL FORECASTS 2020 2019 2018 2017 2016 1.6% 0.9% 1.6% 2.4% 2.6% PRODUCTION & MANUFACTURING 2.4% 2.9% 2.7% 2.2% 2.0% CONSTRUCTION 0.1% 0.9% 1.7% 0.9% 1.0% PUBLIC SECTOR SERVICES 2.4% 1.5% 1.9% 1.8% 1.7% 1.6% 1.3% 1.8% 1.7% 1.7% PRIVATE SECTOR SERVICES TOTAL Source: UUEPC UK INTEREST RATE FORECAST 2016 2015 2.5% 2% 0.6% 0.5% 2020 2019 2018 2017 UK INFLATION RATE FORECAST 2016 2015 1.7% 1.8% 2.4% 1% 0.8% 0.1% 2020 2019 2018 2017 BANK OF ENGLAND BASE RATES UK CONSUMER PRICES INDEX (CPI) 2015 Source: UUEPC 10% 8% 6% 4% 2% 0% Northern Ireland United Kingdom GVA (1) growth rate Unemployment rate House price growth GVA (1) growth rate Unemployment rate House price growth GVA (1) growth rate Unemployment rate House price growth GVA (1) growth rate Unemployment rate House price growth 2016 2017 2018 2019 NI ECONOMIC GROWTH TO BE RELATIVELY MODEST AS OVER RELIANCE ON CONSUMER SPENDING IS UNSUSTAINABLE 2.2 % 3.3 % 1.7 % 1.3 % 2.0 % 3.7 % 1.8 % 5.4 % 4.4 % 1.8 % 1.9 % 4.0 % 2.8 % 2.8 % 1.7 % 1.9 % 4.2 % 3 % 3 % 8.2 % 6.9 % 1.6 % 2.1 % 2.2 % Source: CBR - UUEPC MACRO-ECONOMIC FACTORS IMPACTING UK/NI PERFORMANCE Continued growth in China’s real economy despite volatility in global markets reaction. Oil price collapse good for net importers (such as UK and ROI) but some emerging economies such as Brazil and Russia are dependent on oil exports. Most likely to have bigger impact on NI compared to rest of the UK & ROI. Growth in China Oil Prices Potential Brexit Previous UUEPC research estimated a reduction in Corporation Tax to 12.5% could create approximately 32,000 jobs on assumption that the cost to the NI Block grant would be funded through a reduction in public sector spending. Reduction in Corporation Tax Operating spend is broadly flat in cash terms and will decline in real terms. However infrastructure spending is set to increase by 11% to over £1.1bn by 2020. 11% to over £1.1Billion by 2020 OUTLOOK SPRING 2016: A Year of Major Change
Transcript of OUTLOOK SPRING 2016: A Year of Major Change · 2015-2025 (Selected Sectors) ... Manufacturing +4000...
2016-17 2017-18 2018-19 2019-20% change2016-20
9,745 9,821 9,828 9,854 1%OPERATINGSPEND(1)
1,010 1,036 1,073 1,126 11%CAPITAL SPENDING(2)
CHANGING FACE OF AUSTERITY2015 Spending Review - Northern Ireland Outcome (Cash Terms)
Source: NI Budget 2016-17Note 1: Non-Ring Fenced Resource DELNote 2: Capital DEL (excludes Financial Transactions Capital)
£m IMPACT OF CORPORATION TAX DEVOLUTION
NORTHERN IRELAND EMPLOYMENT FORECAST2015-2025 (Selected Sectors)
Forecast is for approx. 40,000 new jobs over the next 10 years building on approximately 45,000 net new jobs 2012-2015. Agriculture
+200
Manufacturing+4000
Construction+4400
Retail+1900
Transportation+3300
Public Admin & Defence
-6500
Education-1500
Health & Social Work
+3400
Arts & Entertainment
+4000
Info & Comms+4400
Accommodation+3900
Profess & Sci+8500
Admin Services+8100
Source: UUEPC
NORTHERN IRELAND GVA SECTORAL FORECASTS
20202019201820172016
1.6% 0.9% 1.6% 2.4% 2.6%PRODUCTION & MANUFACTURING
2.4% 2.9% 2.7% 2.2% 2.0%CONSTRUCTION
0.1% 0.9% 1.7% 0.9% 1.0%PUBLIC SECTOR SERVICES
2.4% 1.5% 1.9% 1.8% 1.7%
1.6% 1.3% 1.8% 1.7% 1.7%
PRIVATE SECTOR SERVICES
TOTALSource: UUEPC
UK INTEREST RATE FORECAST
20162015
2.5%2%0.6%0.5%
2020201920182017
UK INFLATION RATE FORECAST
20162015
1.7% 1.8% 2.4%1%0.8%0.1%
2020201920182017
BANK OF ENGLAND BASE RATES
UK CONSUMER PRICES INDEX (CPI)
2015
Source: UUEPC
10%
8%
6%
4%
2%
0%
Northern Ireland United Kingdom
GVA(1) g
rowth
rate
Unemplo
ymen
t rate
House
price
growth
GVA(1) g
rowth
rate
Unemplo
ymen
t rate
House
price
growth
GVA(1) g
rowth
rate
Unemplo
ymen
t rate
House
price
growth
GVA(1) g
rowth
rate
Unemplo
ymen
t rate
House
price
growth
2016 2017 2018 2019
NI ECONOMIC GROWTH TO BE RELATIVELY MODEST AS OVER RELIANCE ON CONSUMER SPENDING IS UNSUSTAINABLE
2.2%
3.3%
1.7%
1.3%
2.0%
3.7%
1.8%
5.4%
4.4%
1.8%
1.9%
4.0%
2.8%
2.8%
1.7%
1.9%
4.2%
3%
3%
8.2%
6.9%
1.6%
2.1%
2.2%
Sour
ce: C
BR -
UU
EPC
MACRO-ECONOMIC FACTORS IMPACTING UK/NI PERFORMANCE
Continued growth in China’s real economy despite volatility in global markets reaction.
Oil price collapse good for net importers (such as UK and ROI) but some emerging economies such as Brazil and Russia are dependent on oil exports.
Most likely to have bigger impact on NI compared to rest of the UK & ROI.
Growthin China
Oil Prices Potential Brexit
Previous UUEPC research estimated a reduction in Corporation Tax to 12.5% could create approximately 32,000 jobs on assumption that the cost to the NI Block grant would be funded through a reduction in public sector spending.
Reduction in
Corporation Tax
Operating spend is broadly flat in cash terms and will decline in real terms. However infrastructure spending is set to increase by 11% to over £1.1bn by 2020.
11% to over
£1.1Billionby 2020
OUTLOOK SPRING 2016: A Year of Major Change
