Belfast Telegraph

Better than expected economy growth powered by manufacturing and construction industries in Northern Ireland

The Northern Ireland economy grew by 0.3% at the beginning of the year.
The Northern Ireland economy grew by 0.3% at the beginning of the year.
Ryan McAleer

By Ryan McAleer

Northern Ireland's economy grew by 0.3% in the first three months of 2019, according to new Government figures.

The NI Composite Economic Index (NICEI) is the official measure of how the economy here is performing and, while the index has hit a 10-and-a-half year high, it's still below the peak of activity seen in 2007.

The index is roughly equivalent to Gross Domestic Product (GDP) in the UK.

The latest data from the NI Statistics and Research Agency (NISRA) indicated that the economy grew here by 1.5% between the first quarter of 2018 and the first three months of this year.

Although a better performance than anticipated, economic growth in Northern Ireland remained slower than the UK average, where activity rose by 0.5% during the first quarter and 1.8% over the year.

The economy here appeared largely driven by the production and construction sector during the first three months of 2019.

Services, Northern Ireland's largest sector encompassing everything from estate agents to restaurants, was the poorest performer during the quarter.

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Ulster Bank chief economist Richard Ramsey said the latest index marked the sixth successive quarter of growth, but while stronger than expected the rate of expansion was still weak.

"Industrial production, the public sector and construction all posted quarterly gains," he said. "Industrial production's performance, which is mostly manufacturing, was flattered by a surge in stockpiling ahead of the original Brexit date of March 29. As payback, a significant decline in manufacturing output is anticipated in Q2."

The economist added a surge in house building and infrastructure projects boosted the construction sector's growth rate to 1.5% over the quarter and 7.7% over the year.

"It should be noted that this refers to activity occurring in Northern Ireland only," he said.

"A significant proportion of the workloads of Northern Ireland's largest construction firms are in Great Britain. It would appear that the local market is perhaps holding up better than the GB market."

Mr Ramsey said, while the index had hit a 10-and-a-half-year high, the economy has yet to recover the full loss of output that occurred during the last downturn.

"The NICEI is still 4.4% below the pre-recession peak of Q2 2007," he added.

"Similarly, private sector output remains over 4% below its high recorded almost 12 years ago. This poor output growth performance contrasts with Northern Ireland's robust rates of job creation.

"The number of private sector jobs has increased by 14% since Q2 2007. But despite an additional 71,000 jobs, our private sector is still producing over 4% less output in monetary terms than it was almost 12 years ago.

"This highlights issues of job quality, poor productivity and low wages."

Belfast Telegraph