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Lockdown blamed for economic output fall

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Verdict: Esmond Birnie said the report contained a mix of good and bad news. Credit: Kevin Scott / Belfast Telegraph

Verdict: Esmond Birnie said the report contained a mix of good and bad news. Credit: Kevin Scott / Belfast Telegraph

Verdict: Esmond Birnie said the report contained a mix of good and bad news. Credit: Kevin Scott / Belfast Telegraph

Northern Ireland’s economic output fell 1.6% in the first quarter of the year as lockdown took its toll, according to a report.

The services sector was the main driver, but there were also falls in construction and production, the NI Composite Economic Index (NICEI) found.

A lockdown to contain the spread of Covid-19 came into force on December 26, with restrictions affecting hotels and indoor hospitality remaining in place until May 24.

The quarterly fall was driven by a slump in activity in services, construction and production.

Services suffered a fall of 1.1 percentage points, followed by construction at 0.6 and production on 0.2.

Economic output was down 0.6% on the first quarter of the year in 2020, a time period which did not reflect the full economic impact of the pandemic, with the first national lockdown not imposed until March 23.

The NICEI, which is published by the Northern Ireland Statistics and Research Agency (Nisra), found that while UK GDP had fallen at 1.6% quarter-on-quarter, its year-on-year decline of 6.1% was steeper.

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Nisra said the results reflected longer-term trends after the shock of the pandemic. The worst dip from restrictions was evident in results for quarter two, with a bounce-back following in quarter three.

The statistics also showed that Northern Ireland’s economic output had not fully recovered the ground lost in the economic crash of the late 2000s. Local economic activity is still 8.7% below the maximum value recorded in the second quarter of 2007.

In contrast, UK GDP is estimated to be about 3.5% above its pre-downturn peak.

Dr Esmond Birnie, senior economist at the Ulster University Business School, said: “The results are a mix of bad and more favourable news — signs that Covid-related output declines continued into early this year, mixed with some evidence of an underlying recovery in the economy.

“The figures from Nisra relate to the first three months of this year, when many businesses were subject to restrictions.

“Hopefully, subject to the continued uncertainties around the virus, we will experience substantial economic growth and recovery in the remainder of the year.”


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