Belfast Telegraph

Cigarette factory closure catalyst for 6% slump in production sector

By Margaret Canning

Output from Northern Ireland's production sector has slumped by nearly 6% over the last year as the closure of cigarette factory JTI Gallaher in Ballymena is reflected in official figures.

But the services sector - covering everything from estate agents to restaurants - has grown by 1.2%, reaching its highest point in 10 years.

It had also expanded by 0.2% in the last three months of 2017 compared to the quarter before.

However, the Northern Ireland Statistics and Research Agency (Nisra) said output in services was still 4.5% below the series high in 2006.

And growth in the services sector in the year to the last quarter of 2017 was lower than UK growth of 1.4%.

The business services and finance sector was the driver of the growth in services in the Northern Ireland economy, according to the services and production sector output report.

And Nisra said the slump in the production sector was mainly due to a 41% year-on-year fall in output in the food, beverages and tobacco sector - understood to be a consequence of the closure of the JTI Gallaher factory. The closure of the factory, which employed 800 people, was announced in 2014 and production stopped last year. The site was sold to bus manufacturer Wrightbus.

Nisra said the fall "is driven by a publicly known planned fall in output of a single business" but would not name the business.

Output in the quarrying and mining sector is also down for the fourth quarter in a row, and had fallen by 13% year on year.

However, it was almost 51% above its lowest point in 2005, while UK output had fallen by 42% over the same period.

And there was strong output growth in engineering, with expansion of 12.5% year-on-year.

Output of pharmaceuticals and chemical products was up nearly 8% while basic and fabricated metals output had grown by 6.4%, hitting a record high.

Ulster Bank chief economist Richard Ramsey said engineering output from firms like Bombardier, Wrightbus and Seagate was now at a pre-recession high.

And within the services sector, there was growth of 5% over the year in the transport, storage, information and communication sector, and growth of 3% over the quarter.

But there was a 1.5% decline over the quarter and 0.7% decline over the year in the largest sector of the services economy, which embraces wholesale and retail trade, repair of motor vehicles and motorcycles and accommodation and food service.

Belfast Telegraph

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.