New index shows rise in economic activity
Published 01/02/2013 | 08:00
A new index covering private business, the public sector and agriculture has shown some improvement in economic activity in Northern Ireland.
Economic activity has risen in three of the last four quarters, according to the experimental Northern Ireland Composite Economic Index (NICEI) from the Northern Ireland Statistics and Research Agency (NISRA).
While there was 0.3% growth in the year to July to September 2012, the index highlights that the Northern Ireland economy began to decline in 2007 - nine months before the UK.
The index combines figures for the production, services and construction sectors with agricultural data and information on jobs in the public sector.
Economic activity peaked between April and June 2007 and since then, it has fallen by 11.4%. In fact, it has been shrinking for 16 out of the last 21 quarters.
However, it is now back at levels last seen in 2003, and the number of employee jobs is now at 2004 levels, according to the index.
Danske Bank chief economist Angela McGowan said the production sector emerged from the index as its top performer.
"Output in this sector now sits at 2004 (pre-bubble) levels and it is perhaps important for us to not continually compare recent performance with unsustainable levels of growth during the boom period."
According to the data, the rate of decline in the public sector has been slower than in the private sector. Decline started in 2009, two years after the private sector.
The index fell by 5.3% from its maximum value of 100.2 in late 2009 to the minimum value of 94.9 in the second quarter of 2012.
Ms McGowan said decline in the public sector was "largely influenced" by job losses. "However, the index does not reflect the fact that public sector output levels may not have fallen by as much as the employment data would suggest."
The construction index was evidence of continued hard times, and had declined 40.9% in the past five years, she said. "Recovery for this sector is very much a longer-term prospect."
Ulster Bank chief economist Richard Ramsey said new index was the "most comprehensive" indicator of the health of the economy as it covered both sectors.