MORE than 130,000 workers in the north will lose their jobs and another 125,000 be furloughed by August, economists are warning.
In that worst-case scenario, the economy would contract by an eye-watering 10 per cent, according to a report from EY Ireland.
And it predicts that "a recession is certain and a depression is possible" if economic restrictions need to be in force for a protracted time.
But their doomsday findings generally mirror the catastrophic impact of the coronavirus pandemic, as the threads holding the global economy together are unravelling.
It comes as more businesses shut (Ulster Carpets says it will run down some parts of its operation in the coming days), the north's airports effectively end all but cargo flights, and high street shopper footfall has fallen to zero.
And with thousands of high power consumable businesses shut, demand for electricity is down by as much as 20 per cent on the corresponding period last year, with peak demand 180 megawatts lower - that's enough electricity to power 125,000 homes.
In their report, business advisers EY (Ernst & Young) have researched the potential economic impact of the pandemic in separate ‘Base Case’ and ‘Prolonged Disruption’ scenarios.
The less severe projection would see a high level of disruption until end of May before business begins to return to normal, but Northern Ireland gross domestic output for the year is estimated to be 6.7 per lower, 78,000 people would lose their jobs and 100,000 be furloughed before a bounce back period later in the year.
But in a prolonged period of the virus, there would be a high level of disruption until end of August, GDP plunges 10 per cent and up to 257,000 people will either lose their job or be furloughed.
That is in stark contrast to pre-Covid-19 figures which forecast an additional 1,000 jobs to be created in the north this year.
EY Ireland chief economist Professor Neil Gibson said: “The human cost of this crisis is sadly rising every day - and so is the economic cost, and the effect will be felt for years if not decades due to the scale of borrowing required to see economies through the most virulent phase of the outbreak.
“Early estimates from the EY Economic Eye model suggest a recession is certain, and a depression is possible if the economic restrictions need to be in force for a protracted time.
“We estimate a contraction of 6.7 per cent in Northern Ireland GDP in our base case scenario, but a more prolonged period of economic restrictions lasting throughout the summer would result in a 10 per cent contraction, which would qualify as a depression.”
Graham Reid, partner (head of markets) at EY Ireland, added: “Businesses are grappling with the challenge of making the right decisions in this time of huge uncertainty.
“The challenge we’re facing is unique and in stark contrast to previous recessions. We are now experiencing both a supply side and demand side shock.
“Very few businesses contemplated the impact a pandemic would or could have. How could they?
“Businesses are anticipating a massive financial strain, in some case telling us their revenues will be impacted by more than 25 per cent, despite the unprecedented fiscal stimulus packages from governments north and south.”
Professor Gibson said he believes businesses in the north will still be lost despite the best efforts of policy makers.
He added: “There has been an encouraging level of engagement with businesses and business organisations to chart the best path through this once in a lifetime event, but sadly many will shut, and the cost of the interventions impact future policy decision for a generation.
“But it is heartening that during the most catastrophic economic conditions the ingenuity and resilience of Irish businesses has come to the fore once again.
“They are adapting swiftly and effectively to working from home and many producers have switched production to items urgently in need during the crisis.”
EY predicts that after the crisis, the north's economy will be forever altered, with the embedding of technology to allow remote working likely to create opportunities for businesses (although increased home working would clearly be challenging for the high street and transport companies).
