Official data confirms the north's private sector contracted during the summer of 2019

The Northern Ireland Research and Statistics Agency has confirmed that the north’s private sector contracted by 0.3 per cent between July and September 2019
Ryan McAleer

THE north’s private sector contracted by 0.3 per cent between July and September 2019, official data has shown.

The Northern Ireland composite economic index (NICEI), which measures the performance of the economy here on a quarterly basis, said total economic output fell 0.1 per cent in the third quarter of last year.

The index, which is often measured against gross domestic product (GDP) in the UK , grew by 0.3 per cent over the year to the third quarter (Q3).

It confirmed that economic growth in the north remained well behind UK GDP, which grew by 0.4 per cent in Q3 and 1.1 per cent over the year.

The growth here was primarily driven by the public sector, which grew by 0.4 per cent between July to September, and 1.4 per cent over the year to Q3. The north’s construction sector also was regarded as a positive contributor over the third quarter.

However, when taken as a whole, the private sector in Q3 contracted for the first time in 2019, the first official quarterly decline since the start of 2018. The 0.3 per cent slump between July and September left output flat at zero per cent in 2019.

The production sector alone fell by 0.4 percentage points (pps) in the third quarter.

Throughout 2019, Ulster Bank’s purchasing managers’ index pointed to ten months of consecutive decline in output within the private sector.

The conclusions of the 2019 surveys have now been backed by official government data for the first time.

Ulster Bank’s chief economist Richard Ramsey said the PMI had previously flagged up the contraction.

“The economy is in the crawler lane with the public sector edging forwards. But the private sector is in the crawler lane going backwards,” he said.

In publishing the official figures yesterday, the Northern Ireland Research and Statistics Agency (NISRA) said that when assessed over the longer term, the north’s economy showed signs of growth, albeit at a slower rate than the UK average.

“Over the last two years, growth in NI output increased by one per cent, compared to UK growth of 1.4 per cent. This was an increase on the NI growth rate compared to the two years to Q3 2018 (0.5 per cent).”

Meanwhile, a detailed breakdown of the construction sector by NISRA found that output improved by 3.9 per cent from the second to the third quarter of 2019.

However it remained 2.7 per cent lower than the third quarter of 2018.

"Despite fluctuations, the total volume of construction output in NI has been on an upward trend since Q4 2013,” said NISRA.

The growth within the construction sector over July-September was largely driven by a 10.1 per cent rise in repair and maintenance work.

There was also a 19.3 per cent increase in infrastructure work in Q3, however housing (-1.8 per cent) and ‘other work’ (-3.3 per cent) saw declines.

New data published by NISRA also confirmed that the number of VAT and PAYE registered businesses in the north increased by 1,430 (1.9 per cent) to 75,490 in 2019.

It represented the fourth consecutive year of growth, following the steady decline reported between 2008 and 2014.

The biggest increases were reported in the construction sector, with 300 businesses added, followed by the agriculture, forestry and fishing sector, which reported 235 new businesses.

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