3 2 Overview 1. The impact of Brexit so far: UK economic performance Ireland 2. Modelling the effect of Brexit on the Irish economy. 3. Sector and region-specific problems. 4. Conclusion.
3 3 UK GDP Growth Since Referendum GDP Growth Contributions 6.1 5.1 4.1 3.1 2.1 1.1 % 0.1 -0.9 -1.9 -2.9 -3.9 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Domestic Demand Stocks Net Exports GDP (annual average) Source: ONS
3 4 UK Domestic Demand Components of Domestic Demand UK Business Investment 180 10.0 160 Predicted investment % year-on-year (ma 4Q) Indices: peak in GDP = 100 140 5.0 Range of previous recessions 120 100 0.0 Private consumption Business investment Actual 80 Housing Investment Domestic Demand EU Referendum -5.0 60 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 0 5 10 15 20 25 30 35 40 Quarters since pre-recession peak in GDP Source: Bank of England Source: ONS
3 5 Household Savings Rate at Historic Low UK Household Savings Rate, % of Disposable Income 16.0 14.0 12.0 % of disposable income 10.0 8.0 6.0 4.0 2.0 0.0 Source: ONS.
3 6 UK Trade and Balance of Payments Exports and Imports UK Balance of Payments, % of GDP 20.0 95.0 4.0 3.0 15.0 90.0 2.0 1.0 10.0 % year-on-year 2012 = 100 85.0 0.0 5.0 -1.0 80.0 -2.0 0.0 -3.0 75.0 -5.0 -4.0 Exports Imports REER -5.0 -10.0 70.0 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 -6.0 1948 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 Source: ONS Source: ONS
3 7 Overall UK Economic Performance since Referendum Source: Centre for European Reform.
3 8 UK Slowdown: Effects on Ireland Overseas Visitors to Ireland from Great Britain and Rest of the World, annual % change 25.0 Trade: slower UK growth will have reduced overall activity in Irish economy. 20.0 Evidence across sectors is mixed: Agri-food exports to UK 15.0 2016: -6.3 per cent y-o-y % change 10.0 2017: +9.2 per cent 2018: +3.1 per cent 5.0 Machinery and equipment exports 2011-15: average annual growth of13 per cent per annum 0.0 2016-18: exports fell by 6.5 per cent per annum on average Prices: Sterling depreciation has put downward pressure on Irish -5.0 goods inflation. -10.0 Tourism: UK residents account for 2 out of every 5 visitors to Ireland. 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 Sharp slowdown in number of visitors since mid 2016 (RH chart). Sentiment and uncertainty: signs of a slowdown? Great Britain (includes England, Scotland, Wales) All countries excl. Great Britain Source: CSO
3 9 Economic Activity Index takes sharp dip 1 2.0 0.8 Above March 2019 1.0 average 0.6 June 2013 growth Above 0.4 average 0.0 growth 0.2 August 2019 Below average -1.0 0 -0.2 Below -2.0 -0.4 Hard data average growth Soft data -0.6 -3.0 Note: mean January February March April May June July August * = 0, S.D. = 1 -4.0 Note: mean = 0, 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 S.D. = 1 Source: Author's calculations. Source: Author's calculations.
4 0 Brexit - Modelling the Unknown The UK is the first country to leave the EU. The consequences of that exit are therefore largely unknown. “ Soft ” or “ hard ” ?: a wide range of Brexit outcomes (still) possible. Can the model capture the complexity of the change? Does Brexit cause a structural shift that alters basic relationships embedded within the model? How quickly will trade fall in a no-deal Brexit? What will be the scale of the logistical and supply chain disruption? How will financial markets react? Nevertheless, quantitative estimates are needed to inform debate and assist policymakers. Examples of Brexit modelling work carried out in CBI using COSMO: May 2018 (NIESR Economic Review) : impact of an orderly WTO Brexit. October 2018 (Central Bank Quarterly Bulletin, Box A) : preliminary assessment of impact of UK Government Brexit White Paper (Chequers). January 2019 (Central Bank Quarterly Bulletin, Box B) : Impact of a disorderly Brexit. Builds on other similar work for Ireland by Department of Finance, ESRI and others.
4 1 Approach 1. Model effect of Brexit on UK economy and broader external environment using NiGEM. 2. Use NiGEM outputs as inputs into model of Irish economy (CBI-COSMO). 3. Consider additional shocks important in a disorderly UK exit. 4. Simulate the full scenario.
4 2 Transmission Channels and Assumptions (1) 1. Reductions in trade Tariff and non-tariff barriers reduce UK-EU trade. Estimated 40-50 per cent reduction in goods trade, 35 per cent in services. 2. Foreign Direct Investment Free movement of capital encourages cross-border investment. Reduction in trade reduces FDI. 3. Migration Barriers to free movement of labour may be introduced. UK may become less attractive destination for migrants. 4. Productivity Immediate: rebalancing of economy towards less productive sectors as trade falls. Long run: lower trade, FDI and migration could reduce productivity. Source: NIESR.
4 3 Transmission Channels and Assumptions (2) Other channels: 5. Financial Markets: Potentially large depreciation of sterling. Impact on borrowing costs, equity and bond prices. 6. Sentiment and Uncertainty: Consumer spending and investment would be negatively affected by fall in sentiment and adjustment to weaker future growth and incomes. 7. Importing and exporting: around 25 per cent of Irish goods imports come from UK. Disruption to supply chains with implications for production, distribution and retailing. Added importance due to landbridge. 8. FDI: potential increase in Irish FDI. Magnitude of effect is uncertain. Size of FDI efffect based on Lawless and Morgenroth (2016). Calibrate these shocks based on a synthesis of the available literature. Some judgement is also required.
4 4 With a Brexit deal and a transition period, the economy would remain on a favourable growth path, • although the pace of growth is expected to slow. Real Output Employment 3 6 Deal + transition 5.0 2.4 2.5 Deal + transition 5 4.3 3.9 2 annual % change 4 annual % change 1.5 1.4 3 1.5 2 1 1 0.5 0 0 2019 2020 2021 2019 2020 2021 Source: Central Bank Quarterly Bulletin, Source: Central Bank Quarterly Bulletin, October 2019.
4 5 A disorderly Brexit would see a sharp slowdown in economic activity and employment in 2020 and 2021. • Real Output Employment 3 6 2.4 Deal + transition 5.0 2.5 Deal + transition 5 4.7 2.1 4.3 2 3.9 annual % change annual % change 4 1.5 1.4 1.5 3 1 1.9 2 0.5 0.2 0.8 1 0 0 -0.2 -0.5 2019 2020 2021 2019 2020 2021 Source: Central Bank Quarterly Bulletin, October 2019. Source: Central Bank Quarterly Bulletin, October 2019.
4 6 Disorderly Brexit: Long-Run Effects Output by Sector, % Deviation from Baseline 0 -1 -2 % deviation from baseline -3 -4 -5 -6 -7 -8 -9 -10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Traded Non-traded Total output
4 7 Unemployment Rate 2.5 2.0 p.p. deviation from baseline 1.5 1.0 0.5 0.0 Short Run Medium Run Long Run
4 8 Impact of Disorderly Brexit on Government Deficit and Debt General Government Deficit in a General Government Debt in a Disorderly Brexit, % GNI* Disorderly Brexit, % of GNI* 1.5% 110.0% 1.0% 100.0% 0.5% % of GNI* % of GNI* 90.0% 0.0% Baseline Baseline -0.5% Disorderly Brexit 80.0% -1.0% 70.0% -1.5% 2018 2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025 Source: Authors' calculations based on COSMO. Source: Authors' calculations based on COSMO.
4 9 Sector and Regional Effects 100% Overall macro impacts hide important sectoral variation. 90% Impact of Brexit will not be evenly distributed across sectors Preparations of Cereals 80% meat and fish and regions. Export Share Ire to UK) 70% Agriculture sector stands out as particularly exposed: 60% Sector has a heavy reliance on UK market Meat and offal 50% Dairy Produce, Faces the highest tariffs in a WTO Brexit eggs & honey 40% Sugars and Has weak underlying profitability 30% confectione … 20% Importance of agri-food sector varies significantly by region. 10% 0% 0% 10% 20% 30% 40% 50% Implied WTO Tariff Goods Exports (Agri-Food) Goods Exports (Excl. Agri-Food) Source: Horan and McQuade (2019).
5 0 Agriculture by Region 80 16.0 69.2 68.8 14.2 66.6 70 14.0 % of total employment by region 56.9 57.4 12.2 60 11.8 11.5 12.0 50 44.8 10.2 43.7 41.8 9.7 10.0 40 % 8.3 7.8 8.0 30 25.1 20.6 17.0 20 6.0 11.7 8.6 8.7 6.0 10 2.5 4.0 3.0 0 2.0 0.0 Specialist tillage Specialist dairying Specialist beef production Specialist sheep Source: Census 2016, CSO. Source: CSO Farm Structure Survey 2016. Notes: Chart shows employment in the agri-food sector in each region as a
5 1 Deal + FTA: Effect on UK GDP relative to Stay Scenario
5 2 Summary Evidence that UK economy has slowed since June 2016 referendum. Reduced UK demand for Irish exports will have lowered overall Irish growth with evidence of more pronounced effects in some sectors. Modelling the effect of a disorderly Brexit is an inherently uncertain exercise. Based on assumptions grounded in the academic literature, we find a significant long-run negative effect on Irish output, with the output loss front-loaded in a disorderly Brexit.
Brexit and Cross-Border Trade DATE 17 th October 2019 VENUE On the brink of Brexit: economic consequences for the island of Ireland AUTHOR Martina Lawless www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications www.esri.ie
Outline Levels of economic integration Potential impact on Ireland of “no - deal” outcome Cross-border trade and integration Current state of play www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications
Layers of integration - memberships www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: LGIM www.macromatters.lgim.com/
Brexit trilemma www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications
Northern Exposure www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications
Share of NI in Irish Goods Trade with UK 14% 12% 10% 8% 6% 4% 2% 0% Import share Export share www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: CSO 2016 and InterTradeIreland 20
Northern Ireland External Trade Structure www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: NISRA BESES 2018
Cross-Border Trade Structure www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: CSO 2016 and InterTradeIreland
Share of trade by potential WTO-level tariff level 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 (0, 5] (5, 10] (10, 25] 25+ www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: CSO 2016 and InterTradeIreland
Who Exports? (NI firms) www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: CSO 2016 and InterTradeIreland
Cross-border deliveries by firm size www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: NISRA 2018
Technological solution? www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications Source: Deirdre Heenan via Twitter
Promise of world trade deals? • For UK as a whole: • Unlikely to replace levels of trade in integrated EU market. • Distance still matters to trade. • Trade-offs part of any international deal – across sectors, standards, migration(?). • Financial services and car industry most likely to be prioritised. • For Northern Ireland: • If trade-offs above mean opening UK up to world food imports, would pose major competitive challenges for NI. • Services exports not (currently) a major feature of economy. • Any deal involving changes in food standards very problematic for cross-border flows – technology unlikely to help if standards diverge. www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications
Impact summary Cross-border trade between Northern Ireland and Ireland more like local trade than international export activity Almost all exporting firms in Northern Ireland include Ireland as one of their destination markets. Over 80% of the smallest firm size group that export from Northern Ireland have all of their export sales in Ireland. High degree of cross-border integration through supply chains. High frequency of deliveries and low value per delivery for NI traders across the border. Impacts of any changes in the cost of trading post-Brexit liable to be felt most particularly by very small firms trading across the border. www.esri.ie @ESRIDublin #ESRIevents #ESRIpublications
The Impact of Brexit on the Agri-Food Sector, North and South Kevin Hanrahan and Trevor Donnellan Teagasc On the brink of Brexit: the economic Dublin, October 17 2019 consequences for the island of Ireland
Overview • Agri-Food on the Island of Ireland – Similarities and differences • Why Brexit matters (more) to agri-food • Analysis of Brexit impacts on Irish agri-food • Work to do
Agriculture on the island of Ireland • Agri-food North and South dominated by ruminant grassland agricultural production systems and processing of the resultant meat and milk output • Both agri-food economies overwhelmingly export dependent • Agri-food stories of Ireland (North & South) can largely be told through the stories of beef & dairy
Farm Types: Ireland different to UK and other EU 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% COP Dairying Cattle Cattle & Sheep Pigs Poultry Other COP Dairying Cattle Cattle & Sheep Pigs Poultry Other Dairying Dairying IE NI IE UK FR Source: Eurostat (ef_m_farmang)
Agricultural Output: Ireland different to GB 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% Cattle Sheep Pigs Poultry Milk Cereals Other Cattle Pigs Sheep Poultry Milk Cereals Other IE NI GB NI Source: Eurostat (agr_r_accts)
Average Farm Incomes & Subsidy dependence Northern Ireland Ireland £80,000 €70,000 £70,000 €60,000 £60,000 € 50,000 £50,000 €40,000 £40,000 £30,000 €30,000 £20,000 €20,000 £10,000 €10,000 £0 -£10,000 € 0 -£20,000 - €10,000 Cereals General Dairy Cattle & Cattle & All Dairying Cattle Cattle Sheep Tillage All Cropping Sheep LFA Sheep Rearing Other Lowland Farm Business Income Direct Payments FBI less DP Family Farm Income Direct Payments FFI less DP Source: Teagasc NFS 2018 and DAERA Farm Business Survey 2017/2018
Agri food sector in IRL (2018) • Employment – 173,000 people – 7.9% of total employment – 7.8% of Gross National Income* • Total value of agri-food exports – €13.6 billion of which 40% (€5.6 billion) to UK – Just 15% of that 40% (i.e. 6% of total agri-food exports) went to NI • Total value of agri-food imports – €8.7 billion of which 47% (€4.1 billion) from UK – Mainly from GB Source: DAFM 2018
Agri food sector in NI (2018) • Employment – 40,000 – 4.6% of total employment – 3.7% of Gross Value Added • Total Turnover of Agri-food sector – £6.8 billion • Most of NI’s agri food output goes to GB Source: DAFM 2018
Agri-food Trade Flows • East-West agri-food trade flows dominate North-South trade flows – Gravity matters • But there are some critical North-South trade flows that are particularly important for NI Ag.
Flow of Trade between IE and NI • All Island animal health strategy (covering IE and NI) – Treated as a single zone for animal health – EU SPS regulatory alignment • Agri food trade between IE and NI – Live animals – Finished good and intermediate goods (for further processing) – Trade flows of food products are not so important • Agri food trade between IE and GB – Large flows in agricultural goods from IE to GB – Large flows in processed food/drink from GB to Ireland • and onto Northern Ireland
IE/NI Trade in Milk and Live Animals • Milk – 100 million litres exported from IE to NI annually • ~1% of total IE milk production – 800 million litres exported to NI to IE annually • Over 30% of total NI milk production • Pigs and Sheep – 500,000 live pigs exported from IE to NI annually – 400,000 live lambs exported from NI to IE annually
Why Brexit Matters to Agri-Food • Brexit (at least in part) is about changes in trade policy • Tariffs and non-tariff barriers (NTB) to trade much more important in agri-food than for many other areas of merchandise trade • Integration of IE and UK (NI) economies means that market price impacts of Brexit likely to be very large • UK is a large net contributor to the EU budget. – Most of the “ juste retour ” Ireland gets from the EU budget is via CAP – UK Brexit “ dividend ” from lower agricultural income support?
Brexit and Agriculture • Channels through which Brexit affects Irish/Northern Irish agriculture – Immediate impact via exchange rate – Tariff & non-tariff barriers to trade – For IE via impact of Brexit on EU budget and CAP – For NI via impact of future UK (Devolved?) Ag policy
What does Brexit Mean for Ag ? • We obviously still don’t know what Brexit means for the magnitude of tariffs and NTB • We know the No Deal EU trade policy – The UK is a third country and WTO rules apply • We think we know the UK trade policy – The announced “temporary” No Deal tariff schedule • We don’t know the shape of future UK or devolved NI agricultural policy
UK No Deal Trade Policy • UK No Deal tariff schedule (March and October 2019) • Many tariffs set to zero – so Brexit “delivers” lower prices for UK consumers • But UK government would apply some tariffs – To protect UK producers – Retain something to “trade” in a future trade negotiation with EU and/or other third countries • UK also plans to use Tariff Rate Quota (TRQ) – a TRQ allows in a limited volume of imports at low or no tariff – To be used to manage UK imports of beef & poultry
Trade Weighted Average UK MFN Tariffs (No Deal Temporary tariff schedule) 60 Ad Valorem Equivalent % 50 40 30 20 10 0 Cereals Butter & Cheese Beef * Sheep Pig meat Poultry Dairy meat Meat Spreads * Beef AVE tariff relates to the over-quota tariff. The in quota tariff is set at zero.
EU No Deal Trade Policy • MFN tariffs as per EU schedule at WTO – These tariffs are very high • Regulatory barriers & customs procedures to protect SM integrity will represent an important NTB – Entry of animal and food products only via BIP – Requirements for physical inspections on entry to EU – Licensing/inspection premises in the UK that wish to export to the EU – Rules governing what is an “ EU ” product & RoOs
Trade Weighted Average EU MFN Tariffs (Under No Deal) 80 Ad Valorem Equivalent % 70 60 50 40 30 20 10 0 Cereals Butter & Cheese Beef Sheep Pig meat Poultry Dairy meat Meat Spreads Note: Calculated using 2018 EU28 imports from UK
Irish and Northern Irish Agri-Food & Brexit • Greatest negative economic impact on sectors where – Large share of output is exported to the UK (EU) – That have high levels of tariff protection currently (preferential access) and are not internationally competitive – High level of income dependence on direct payments – Where existing margins from production are small
Ireland: Beef • Most exposed Irish agri-food sector is beef – Very high dependence on exports to UK – Large loss in preferential access with No Deal – Lack of competitiveness at world market prices – High dependence of farm incomes on CAP direct income support payments – Chronic low levels of profitability => little or no ability to absorb lower margins at either farm or processing stage
Northern Ireland: Dairy • Under a No Deal Brexit Northern Irish ag sector most exposed is dairy – Very high dependence on exports of milk for processing/consumption in Ireland – Both tariff and non-tariff barriers to trade will apply in event of a no deal and will effectively halt this trade – No feasible processing capacity for the 800 m litres of NI milk (currently shipped south) within the UK
Northern Ireland: Beef • Sector v. “ export ” dependent but market is mostly in GB • Any Brexit opportunities (import substitution) will depend on degree to which UK No deal trade policy leads/doesn ’ t lead to lower UK beef prices • Dependence on CAP direct payments means sector very vulnerable to changes in UK Ag. Policy • Very low profit levels at farm and processor levels mean sector is unlikely to be able to withstand negative market or policy impacts of Brexit
Ireland: Dairy • Less exposed to UK Market than beef – Some segments have higher exposure (cheddar) • UK No Deal Tariffs on dairy are relatively low • Irish dairy exports competitive at world market prices – => Loss of preferential market access doesn ’ t necessarily mean loss of UK market share • Low dependence on CAP direct income support payments • Profitable business at farm and processor levels => even with Brexit Irish milk production likely to continue to grow
What impact will tariffs & NTB have on trade? • Demand curves slope down Tariffs and NTB will reduce trade – Key uncertainty surrounding magnitude of trade elasticities • With tariffs of >50% applying to some agri trade flows leads to dramatic impacts on trade • What happens to prices, production and use ? • Using PE models of Irish and Northern Irish/UK agricultural economies to assess impact of Brexit “scenarios”
Partial Equilibrium Model based analysis • AFBI-FAPRI (2017) • Teagasc-FAPRI analysis of three Brexit (2018/2019) analysis of Scenarios No Deal Brexit Scenarios – WTO – WTO – Unilateral Trade Liberalisation – UK temporary tariff – EU-UK FTA schedule • With TRQ variants
AFBI analysis • AFBI analysis predates the UK No Deal Trade policy announcement • Highlights the trade offs between an explicitly protectionist UK trade policy and a very liberal trade policy stance – The more “liberal” the UK trade policy stance the larger the negative impact on N. Irish agriculture • Management of UK beef imports via TRQ and a solution to the problem of what to do with NI milk production will be critical to mitigating the negative impact of Brexit on N. Irish agriculture
Teagasc Analysis • Analysis for Government of impact of WTO Scenario and announced UK No Deal trade policy – Assumes its persists over the medium term under a No Deal Brexit • Large negative price impact on Irish beef prices of almost 20% versus Baseline if Ireland fails to retain partial preferential market access offered by UK TRQ • Negative price impacts for all sectors except Lamb – Due to exclusion of UK lamb from EU markets • Overall Irish Agricultural Sector Output projected to decline by over € 700m per annum and Operating Surplus (Ag Sector Income) declines by over € 500m by 2026
Work to do • Analysis has focused on impact of tariff barriers • Questions about impact of NTB will arise in the event of a future EU-UK FTA • Clarity on actual trade rules will allow for scenario analysis grounded in some political facts – That will be novel !! • Analysis of the impact of Brexit on the structure of the Irish and Northern Irish farm sectors will be needed – Brexit likely to accelerate structural change processes
Brexit: Workers at Risk and Policy Responses to Maintain Employment On the brink of Brexit 17 October 2017 PAU L M AC F LY N N N E R I ( N E V I N E C O N O M I C R E S E A RC H I N S T I T U T E ) B E L FA S T PAU L . M AC F LY N N @ N E R I N ST I T U T E . N E T W W W. N E R I N ST I T U T E . N E T
Context o Unemployment in NI - historic low of 2.8% (May – Jul ’19). o Total no. of jobs >900k (Q2 2019) o Economic Inactivity still higher than UK, almost same as ROI. o Seems like an odd time to be designing gov programmes to deal with significant increase in unemployment. o Advantages: o Time – not exogenous shock, conscious policy decision. o Impact – some idea of where will be hit o Disadvantages: o Limits to help – compensation for tariffs cannot be direct. o Unlike cyclical downturn, hard to see natural recovery.
-6.00% -4.00% -2.00% Northern Ireland GVA 0.00% 2.00% 4.00% 6.00% 8.00% 1999 Q1 1999 Q3 2000 Q1 2000 Q3 2001 Q1 2001 Q3 2002 Q1 2002 Q3 2003 Q4, 5.49% 2003 Q1 2003 Q3 2004 Q1 2004 Q3 2005 Q1 2005 Q3 2006 Q1 2006 Q3 2007 Q1 2007 Q3 2008 Q1 2008 Q3 Recession 2009 Q1 2010 Q1, -4.79% 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q3, 4.17% 2015 Q1 2015 Q3 2016 Q1 2016 Q3 2017 Q1 2017 Q3 2018 Q1 2018 Q3 2019 Q1
Context o Financial crash in NI, similar experience to ROI but more benign on jobs/unemployment. o Unemployment rate increases from 3.2 in Q2 2017 to 8.3 in Q4 2012 o Total number of jobs falls by 78,000 between Q2 2008 and Q4 2012
Jobs recession to recovery 1000000 100000 200000 300000 400000 500000 600000 700000 800000 900000 0 1999 Q1 1999 Q3 2000 Q1 2000 Q3 2001 Q1 2001 Q3 2002 Q1 2002 Q3 2003 Q1 2003 Q3 2004 Q1 2004 Q3 2005 Q1 2005 Q3 2006 Q1 2006 Q3 2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3 2016 Q1 2016 Q3 2017 Q1 2017 Q3 2018 Q1 2018 Q3 2019 Q1
0 1 2 3 4 5 6 7 8 9 recession to recovery Unemployment – 1999 Q1 1999 Q3 2000 Q1 2000 Q3 2001 Q1 2001 Q3 2002 Q1 2002 Q3 2003 Q1 2003 Q3 2004 Q1 2004 Q3 2005 Q1 2005 Q3 2006 Q1 2006 Q3 2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3 2016 Q1 2016 Q3 2017 Q1 2017 Q3 2018 Q1 2018 Q3 2019 Q1
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