America first policy temporarily grounded?

2017 highlighted the extent to which Northern Ireland has a high dependency on a small number of large firms. This can be seen in the latest Northern Ireland Economic Composite Index. It showed a fall in the index in Q3 2017, driven by a huge drop in the food beverages and tobacco sector. This dragged Northern Ireland manufacturing output down, falling at its fastest rate since the global recession. This was almost entirely down to the closure of the JTI tobacco factory in Ballymena. Take it out of the equation and it would have been a very different story.

This year, we are also going to see the closure of the Michelin factory in Ballymena, which will hit the manufacturing figures hard again in 2018. And then we have the closure of Schlumberger to come. Changes in things like regulations and costs can lead these foreign-owned companies to make swift decisions to move their operations to other locations around the globe.

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Putting the economy first again

Brexit.pngThe tectonic plates of the established global trading system are moving. BRUMP – the Brexit vote and the Trump presidency – have created two fault lines – one in North America and the other in Europe.

2016 therefore looks to have been the peak for trade liberalisation. Moves to create a Trans-Pacific Partnership (TPP) trade deal and a European equivalent – the Transatlantic Trade and Investment Partnership (TTIP) – have already been scuppered by the current US President. These initiatives, years in development, were cancelled with a stroke of a pen earlier this year. Meanwhile Trump’s administration is also seeking to dismantle the North American Free Trade Association (NAFTA). Continue reading

Chief Economist’s Weekly Brief – Something new

The UK economy may be on the cusp of receiving two new little growth boosts. Firstly, the Chancellor signalled an adjustment in fiscal policy to free up cash for investment. Second, the recent fall in sterling may do what the crisis-driven fall in sterling couldn’t: help generate a sustained export improvement. Both would certainly be welcome. Continue reading

Chief Economist’s Weekly Brief – Summer soft patch

It’s looking a lot like October all over again. Just as a flurry of US policymakers were talking up the chances of a Fed rate rise later this month, the labour market produces a bad headline and throws it all into doubt. Exactly the same thing happened towards the end of last year when October’s move was postponed till December.

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