Growth of 1.6% 'shows Northern Ireland's economy has turned corner'
Published 30/01/2014 | 04:23
A jump of 1.6% in Northern Ireland's economic activity during the second half of 2013 is further evidence of robust recovery, it has been claimed.
The good news was welcomed by economists – although they cautioned that Northern Ireland still has a long way to go.
An important economic indicator has revealed that activity hit a level last seen in 2004, although it was still 9.5% below its peak in 2007.
The economy has now had two quarters of growth in a row, with an increase of 1.2% between the third quarter of 2012 and the same period the following year.
Activity also grew 1.6% between the second and third quarters of 2013, according to the Northern Ireland Composite Economic Index (NICEI).
Danske Bank chief economist Angela McGowan (right) said: "The positive reading from this latest economic indicator – when combined with falling benefit claimant numbers locally, a stabilised housing market and a recovery in confidence levels – demonstrates that the local economy has definitely turned a corner."
She said growth was spurred on by the production and private services sector, which include manufacturing, and hotels and restaurants respectively.
"The transport and ICT sector produced a stellar performance with a growth rate of 6.7%, with other sectors such as manufacturing also performing well with 4.9% growth," Ms McGowan added.
"The accommodation and food sector, meanwhile, clearly benefited from the tourist events that took place last year with this sector experiencing growth of 3.9%. "Without doubt economic output levels in Northern Ireland have taken a turn for the better but there is still plenty of scope for even more growth."
Northern Ireland Chamber of Commerce chief executive Ann McGregor welcomed the signs of recovery, which she said were consistent with the chamber's quarterly survey. But she warned it appeared fragile in comparison with the UK as a whole.
"Around three-quarters of our members are forecasting their business to grow this year but for most the expectation is that growth will be relatively muted. It is too early to tell whether we have turned a corner just yet."
Ulster Bank chief economist Richard Ramsey said the index was further evidence of "robust" recovery which began last summer. But he added: "The economy still has a long way to go to recoup the output it has lost in the downturn. Looking at the private sector, it's clawed back one quarter of the output it lost."
The Northern Ireland Composite Economic Index (NICEI) is used to measure economic performance in the absence of figures capable of providing a figure for the more common gross domestic product (GDP).
The UK's GDP and the NICEI do not measure exactly the same thing but can still be compared.
The NICEI grew 1.6% between the second and third quarters of last year, while the UK's GDP grew by 0.8%. The NICEI is now 9.5% below its peak, but UK GDP is just 2% below its peak in the first quarter of 2008.