Northern Ireland’s stubbornly low productivity rate has jumped sharply, but the impact may be short lived.
Those are the findings of a report by Queen’s University - ‘Northern Ireland Productivity Dashboard 2023’ - put the improvement down to changes in the hours worked by employees here during the Covid-19 pandemic.
The analysis, which digs in to a subject which has been the achilles heel of the Northern Ireland economy for many years, found the improvement was is likely to be short lived and any gains erased once figures for the current period are available.
Explaining the potential aberration, it said the province saw a sharp fall in the number of hours worked over the pandemic combined with the smallest fall in total output, two factors which combined to drive up productivity per hour.
That helped to narrow the productivity gap to the UK average to just 11% between 2020 and 2021, the lowest level on record. That is a big improvement on the 15%-20% norm and sees the province jump to seventh place in a ranking of UK regions by productivity.
However, the uplift is unlikely to last.
“Our productivity dashboard provides an insight into this puzzle, and whether the foundations are in place for a continued improvement in NI’s productivity,” the report said. “It shows that Northern Ireland continues to possess weaknesses across key areas that drive long-term growth in productivity.
“This suggests the recent improvement in productivity was predominately a result of the Covid-19 pandemic, and is unlikely to be maintained into the future.”
The report said 14 of the drivers it measured in assess productivity are below the UK average.
However, there is some good news.
“Despite being below the UK average, exports, R&D, and business births have all seen short and long-term improvements,” it said. “Similarly, most drivers within the category of investment, infrastructure and connectivity have seen short-term improvements.
“Long-term improvements continue to be seen in levels of tertiary education and those with no skills. There has also been a welcome short-term reduction in economic inactivity, although this still remains the highest rate of any UK region.”
