Mid Ulster economy one of hardest hit by COVID-19

Home to 50,000 jobs, and accounting for 7.3 per cent of Northern Ireland’s total economic output, a report from The Centre for Progressive Policy (CPP) has claimed the economic output in Mid Ulster could decrease by as much as 45 per cent in the second quarter of this year.

The CPP has applied an Office of Budget Responsibility Scenario (OBR) to all UK local authorities.

The OBR scenario suggests a three month lockdown, followed by three months of gradual reopening could see the economic output fall by 35 per cent across the UK in the second quarter of this year.

Applying this scenario to Mid Ulster, and using the OBR’s figures for the share of output that would be lost in each sector of the economy, the CPP claims Mid Ulster could see a 45 per cent fall in economic output.

This would make it the seventh worst hit local authority in the United Kingdom.

The extent of the anticipated decline is largely as a result of Mid Ulster’s position as the centre of manufacturing and engineering, where it accounts for 21 per cent of the local economy.

Speaking about the report, Chair of Mid Ulster District Council, Councillor Martin Kearney called on Stormont to support the district’s economy.

“The predicted drop in GVA for Mid Ulster is stark and the significance of regional variations across the UK cannot be ignored,” he said.

“This report underlines the very real need for a bespoke intervention by the Department for the Economy and Invest NI, to bring a package of immediate, substantial and sustained support for Mid Ulster if our economy is not to be shredded by the impact of the pandemic.

“We are already engaging with businesses across Mid Ulster, from manufacturing to retail, to ensure there is a very clear understanding of what the impact is, which will allow us to demonstrate what support is needed and where it should be targeted.”

Meanwhile, a Dungannon based councillor has claimed the region could be “a victim of its own success”.

“This figure is primarily because of our industries. We could be a victim of our own success,” said Ulster Unionist Party councillor, Walter Cuddy.

“If you were in an area full of government jobs you wouldn’t be as badly hit but we have a strong independent jobs base, built on private industry.

“But I’m always an optimist and I’m that the economy will bounce back as quickly as it has gone down.”

While it is clear Mid Ulster will face an immediate economic hit as a result of the COVID-19 pandemic, Councillor Cuddy is also concerned about the longer term impact on householders’ finances.

“The problem is the populations’ savings will have gone down as well and that will have a lasting effect,” he said.

“You can’t blame anyone for these circumstances. There is a chance this could happen again, so I think everyone will have to factor that in when things begin to return to normal again. Some things have changed forever as a result of this pandemic.”

The worst hit area in the UK, the CPP estimates, will be Pendle, a borough of Lancashire, England, which will, the think tanks says, see a decline in Gross Value Added (GVA) of 49 per cent.

The next local authority from Northern Ireland on the list is Mid and East Antrim, which is ranked 122nd. It is expected to see a 40 percent decrease in its economic output.

The least affected areas in Northern Ireland are likely to be, the CPP claims, Belfast and Derry City and Strabane with each experiencing a 30 per cent decline in output.

Commenting on the report, Sinn Fein councillor, Cathal Mallaghan said: “The Mid Ulster council area is already the poor relation in terms of our local economy.

“The area has had no Foreign Direct Investment, little in terms of central government infrastructure and a lack of investment in our broadband and roads.

“The relocation of Rivers Agency to Loughry by Michelle O’Neill as DARD Minister and the Fire and Rescue Training Centre has been the two single biggest impacts.

“However, in saying that what we are rich in, is an entrepreneurial blood vein that runs deep in our society. There is a desire to do business and an appetite to create jobs here. This part of the world has a solid agrifood base and manufacturing sector.”

Councillor Mallaghan also highlighted the potential for the Mid, South and West region deal to provide a economic boost as life begins to return to normal.

“Last month I took up the role as Chair of the Mid, South and West region deal steering group. A mechanism to release 100s of millions into our area to boost innovation in our industries,” said Cllr Mallaghan.

“Now, more than ever, that is going to be the single most important tool we can use to help our economy recover from this crisis.

“We will be hit hard by COVID-19 and the steps local firms have taken to help prevent the spread is to be applauded. It has been difficult for staff and their families but it is the right thing to do.”

He also urged the public to support local businesses where possible.

“Our retail sector employs thousands across Mid Ulster and it will be greatly impacted by this pandemic. I call on the public, that when the lockdown is lifted, please support your local businesses.

“Please give your local economy every chance of survival. Money spent locally benefits your neighbours and friends and will ensure that we can sustain as many jobs as possible.”

“The rates holiday should also be extended to give them a fighting chance of coming back,” he said.

While this scenario predicts a sharp downturn in economic output, the Centre for Progressive Policy also suggests that under the conditions upon which the report is based, the economy would bounce-back rapidly in the second half of the year.

The report can be viewed at https://www.progressive-policy.net/publications/which-local-authorities-face-biggest-immediate-economic-hit

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

In order for us to continue to provide high quality and trusted local news on this free-to-read site, I am asking you to also please purchase a copy of our newspaper whenever you are able to do so.

Our journalists are highly trained and our content is independently regulated by IPSO to some of the most rigorous standards in the world. But being your eyes and ears comes at a price. So we need your support more than ever to buy our newspapers during this crisis.

With the coronavirus lockdown having a major impact on many of our local valued advertisers - and consequently the advertising that we receive - we are more reliant than ever on you helping us to provide you with news and information by buying a copy of our newspaper when you can safely.

You can also enjoy unlimited access to the best news from across Northern Ireland and the UK by subscribing to newsletter.co.uk

With a digital subscription, you can read more than five articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit https://www.newsletter.co.uk/subscriptions now to sign up.

Thank you