Northern Ireland’s economy is showing signs of recovery, with growth in manufacturing and construction, according to a new report.

However, the latest ‘Northern Ireland Economic Outlook’ from PWC has warned that, in terms of job creation, exports and forecast economic growth, Northern Ireland is showing the slowest recovery among the 12 UK regions.

Allowing for inflation, the report said that the Northern Ireland average hourly earnings at the start of 2013 were only around two pence more than they were in 2003.

The document forecasts economic growth of around 0.5% in 2013, possibly rising to 1.5% in 2014, assuming there is a continued steady recovery in the UK and Republic of Ireland.

Invest Northern Ireland delivered a 41% increase in foreign direct investment (FDI). The increase is substantially ahead of UK FDI over the same period, with new projects including legal services, financial services and ICT securing almost 2,800 jobs in Northern Ireland.

Although the increase comes off a relatively low base it still serves to demonstrate that Northern Ireland remains very attractive to overseas investors.

Attractive tax incentives for investors, combined with available skilled labour, a relatively low cost base and a business-friendly environment, indicate that potential exists for further FDI.

There is some concern over the amount of young people unable to find work, while older workers are benefiting from new, part-time opportunities. Northern Ireland’s economically inactive total also remains particularly high at around 29% of the working age population, compared to the UK average of 23%.