No recovery in the retail sector before 2025, says EY report
The technology sector will have recovered from the effects of the coronavirus and lockdown by the end of this year, but retail will not see 2019 levels of activity until beyond 2025.
Overall, the economy here will not recover to its 2019 size until 2023 and Northern Ireland’s will take a further year return to pre Covid-19 levels, according to a new report.
The EY Economic Eye anticipates that the Republic’s overall economy will recover by 2023 but many sectors will remain depressed for five years from the start of the outbreak or longer.
That includes retail – traditionally a huge employer and which alongside agriculture faces the slowest recovery of any sector.
Other people-facing sectors like hotels, restaurants and the arts face an only slightly shorter recovery – none is expected to see 2019 levels till 2025. Manufacturing will recover by 2023, in line with the broader economy but construction is not expected to recover to pre-Covid levels that were already failing to meet the country’s housing needs until 2024.
In Northern Ireland, where a recovery is set to be slower, 70pc of sectors face waits of longer than five years to recover – compared to 40pc of sectors in the Republic.
EY predicts 38,000 job losses in Northern Ireland this year, and 25,000 next year.
While the toll of job losses is steeper this year for the Republic – with 9.7pc of jobs going instead of 4.2pc – the Republic is expected to see jobs growth next year and to recover more quickly than the North.
The report from business advisors EY is written by its chief economist Neil Gibson and manager Eve Bannon.
They say sectors such as retail, and accommodation and food should see activity pick up later in the year as they adapt to a new socially-distant way of operating. The expectation is that the numbers returning to work will be will be fewer than employed previously, or will involve shorter hours – and therefore less pay – for those who return.
It states that economic recovery is on the way across the island of Ireland.
But it adds that “for many markets across the world, the hardest yards are still ahead and the fear of a second wave and future economic disruption is prevalent”.
While it forecasts a steeper slump in GDP for the Republic at -10.8pc than Northern Ireland at -10.4pc, it warns that Northern Ireland’s economy will take longer to recover.
And while the bigger Irish economy will rebound by 6.6pc next year, Northern Ireland’s first year of recovery will be more muted at 5.5pc.
In addition, the report said that the picture for unemployment in Northern Ireland had been clouded by the widespread use of the furlough scheme, which has preserved the jobs of 240,200 people over lockdown.
In addition, 76,000 people in self-employed roles have received support from the British government’s self-employed income support scheme.
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