Recovery 'a work in progress' despite Northern Ireland growth of 2.4%
Northern Ireland's economic recovery is still "a work in progress" despite enjoying growth of around 0.3% in the first three months of the year, it's been claimed.
The Northern Ireland composite economic index said year-on-year growth was 2.4% - which was above the UK GDP rate of growth of 2%.
And the services sector - covering everything from estate agents to restaurants - was the main driver of the quarterly expansion in Northern Ireland, expanding at a rate of 0.5%.
The private sector showed quarterly growth of 0.4% and annual growth of 3.4%.
However, construction output stats showed that the sector contracted by 1.7% between the last quarter of 2016 and the first three months of this year.
But year on year, it contributed 0.5 percentage points to the growth of 2.4%.
And while production fell by 0.2% quarter-on-quarter, there was strong growth at 0.9% for manufacturing firms within the classification.
Ulster Bank chief economist Richard Ramsey said the growth should not be interpreted as heralding a complete recovery following the economic downturn which began in 2008.
"Despite the ongoing expansion in the economy, it should be noted that Northern Ireland's recovery remains a work in progress. In just over four years, the local private sector has recovered two-thirds of the output it lost during the downturn.
"Output in quarter one 2017 was still almost 4% below the corresponding level a decade ago and is back at where it was prior to the 2006/07 'bubble' (ie late, 2005)."
And he said a recovery in jobs in the private sector was not being matched by a recovery in output.
"There are 10% more private sector jobs in quarter one 2017 than there were a decade ago.
"Significantly, however, despite these additional workers, Northern Ireland's private sector is still producing less than a decade ago.
"This underscores the severe productivity challenge the local economy faces."
And while the private sector has surged ahead, the same could not be said of the public sector. He said: "The public sector has been retrenching in the face of public spending cuts, with a 10% reduction in staffing levels.
"Looking ahead, while the vast majority of job losses in the public sector are already behind us, the sector is not expected to be a source of employment growth in the years ahead. Fiscal austerity is set to continue for the foreseeable future."
Robert Gibson, assurance director at business advisory firm Grant Thornton, said the construction figures presented a "mixed picture".
While there had been a 1.7% quarterly fall in output, it was up 7.1% on the year before.
And there were parts of the sector with strong growth, including housing - which was up by nearly 8% on the previous quarter.
New work levels, however, were down 7.2%, "which, when combined with the sharp drop in infrastructure output, suggests that the current political inertia is impacting the industry".
Danske Bank economist Conor Lambe said: "While it is obviously good news that the economy is growing, there are still a number of challenges on the horizon including the continuing squeeze on consumers, the impact of Brexit-related uncertainty on business investment and the lack of a local Executive."
"Growth in the economic composite index is not strictly comparable with GDP in the UK, but serves as a working comparison."