The economy of Northern Ireland is the smallest of the four constituents of the United Kingdom and the smaller of the two jurisdictions on the island of Ireland. At the time of the Partition of Ireland in 1922, and for a period afterwards, Northern Ireland had a predominantly industrial economy, most notably in shipbuilding, rope manufacture and textiles, but most heavy industry has since been replaced by services. Northern Ireland's economy has strong links to the economies of the Republic of Ireland and Great Britain.
Overview
Output and economic growth
Northern Ireland has the smallest economy of any of the twelve ITL 1 regions of the United Kingdom, at £27.4bn (€37.8bn). However, this is partly because Northern Ireland has the smallest population; at £15,200 (€21,000) Northern Ireland has a greater GDP per capita than both North East England and Wales.
Rural areas including the North West are particularly deprived. It suffers from the highest unemployment and highest poverty rates in Northern Ireland.
Throughout the 1990s, the Northern Irish economy grew faster than the rest of the UK, due in part to the rapid growth of the economy of the Republic of Ireland and the so-called "peace dividend". An April 2007 survey found Northern Ireland's average house price to be one of the highest in the UK, behind London, the South East, and the South West. It also found Northern Ireland to have all of the top ten property "hot spots", with the Craigavon and Newtownards areas increasing by 55%. However, as of 2018 Northern Ireland house prices are the lowest on average in the UK, approximately 40% lower than before the bubble burst in 2008.
Employment
Unemployment in Northern Ireland has fallen substantially in recent years, and is now roughly at 6.1%, down from a peak of 17.2% in 1986. Youth unemployment and long-term unemployment have fallen most quickly. Working-age economic inactivity is 28%, which is the highest of any UK region.
Northern Ireland's macroeconomy is also characterised by considerably longer actual working hours and lower gender income disparity than in the United Kingdom as a whole.
Investment
Foreign direct investment was restrained by The Troubles. Since the signing of the Good Friday Agreement, investment in Northern Ireland has increased significantly. Most investment has been focused in Greater Belfast and to a lesser extent Greater Derry. Major projects include the Victoria Square Shopping Centre Belfast City Centre. Titanic Quarter is a waterfront development under construction. The Laganside Corporation was previously at the forefront of the redevelopment along the banks of the River Lagan. The Cathedral Quarter has also seen substantial investment. In Derry, the ILEX Urban Regeneration Company no longer exists. The area is 12th in terms of funding despite it being the second city.
Agriculture
Agriculture in Northern Ireland is heavily mechanised. In 2000, agriculture accounted for 2.4% of economic output in Northern Ireland, compared to 1% in the United Kingdom as a whole. As in the rest of the United Kingdom, livestock and dairy account for the majority of agricultural output. The main crops are potatoes, barley, and wheat.
Manufacturing
Machinery and equipment manufacturing, food processing, textile and electronics manufacturing are the leading industries. Other industries such as papermaking, furniture manufacturing, aerospace and shipbuilding are also important, concentrated mostly in the eastern parts of Northern Ireland.
Northern Ireland experienced a period of steep manufacturing growth between 1998 and 2001.
Engineering is the largest manufacturing sub-sector in Northern Ireland, particularly in the fields of aerospace and heavy machinery. Major employers are Moy Park, Spirit Aerosystems, Caterpillar and Seagate.
Harland and Wolff, which in the early 20th century was the world's biggest shipbuilder, suffered from intense international competition during the 1970s and 1980s and declined rapidly. During the 1990s the company diversified into civil engineering and industrial fabrication, manufacturing bridges and oil platforms. The vast works on Queen's Island were downsized, with much of the land (including the slipway where RMS Titanic was built) sold off for redevelopment in the 2000s as the Titanic Quarter. H&W has not built a ship since 2003, but has seen workload increase through shipbreaking, ship repair and maintenance and conversion work. The company has also been active in the design and construction of offshore power generation equipment- both wind turbines and wave-action turbines.