Output plummets in manufacturing and services during 'Covid quarter'

Manufacturing output slumped in Northern Ireland in the last quarter, led by transport equipment (which includes Bombardier), which fell to an 11-year low down 38.5 per cent
Gary McDonald Business Editor

ECONOMIC output plummeted across Northern Ireland in virtually ever sector in the second quarter of this year, covering the March-May period in which many employees were in lockdown and their movements restricted.

Figures from the NI Statistics and Research Agency reveal that services sector output fell by 17.7 per cent while the production dipped by 14.9 per cent over the quarter, both record declines.

"These statistics have finally revealed the scale of the much talked about economic impact on two key parts of our economy and it follows news earlier in the week that the region posted its first quarterly decline in employee jobs in four-and-a-half years," Ulster Bank chief economist Richard Ramsey said.

"Like a game of snakes and ladders, the Covid-19 pandemic has acted as a big snake taking industrial and services output back to square one or new series lows."

Mr Ramsey added that while Northern Ireland can expect record rates of expansion in quarter three, albeit coming off multi-year or record lows, climbing out of the huge economic hole created by the pandemic "will be measured in years - not quarters or months".

"A recovery from these unprecedented rates of decline has already begun in manufacturing and services, but a long bumpy road lies ahead,", he said.

Prior to quarter two, the north’s services sector had posted three successive quarters of contraction in output, the lowest decline being minus-6.5 in the first three months of this year.

But revisions to the earlier data suggests Northern Ireland’s official ‘technical recession’ will have begun in quarter four of 2019.

All four of the services sub-sectors saw output decline both quarter-on-quarter and year-on-year.

On an annual basis, business services and finance was down 19.6 per cent; transport, storage, information and communication down 19.8 per cent and wholesale and retail trade (which takes in retail and hospitality) dropped by 22 per cent over the year.

But the ‘other services’ category, which includes tourism-related services such as leisure, arts and entertainment alongside personal services such as beauty salons, nail bars, dentists, physiotherapists and tattoo parlours, saw output plunged by a whopping 38.9 per cent over the quarter and by 46.5 per cent over the year.

"This means output is 40 per cent lower than when the data series first began more than 15 years ago," Mr Ramsey said.


Like services activity, industrial production output fell in all four of the main sectors - manufacturing down 21.8 per cent over the year, water supply, sewerage and waste management by 28.3 per cent, electricity, gas, steam and air conditioning supply by 14.4 per cent and mining & quarrying by 32.7 per cent.

Mr Ramsey added: "Manufacturing is the most significant component of industrial production in Northern Ireland, accounting for some 83 per cent of output, and overall the figure is down 14.6 per cent on the last quarter and and 21.8 on last year.

"These record rates of decline compare with minus-7.0 per cent q/q and minus-15 per cent y/y during the depths of the last recession in the fourth quarter of 2008."

The official figures show one sector within manufacturing managed to post quarterly growth over the March-May period - not surprisingly chemicals & pharmaceutical products saw output rise by 1.3 per cent quarter-on-quarter.

All other manufacturing sub-sectors posted double-digit declines over the three-month period, led by transport equipment (this includes Bombardier) at an 11-year low down 38.5 per cent; basic & fabricated metal products down 35.9 per cent; machinery & equipment engineering down 24.9 per cent; wood & paper products down 19.3 per cent; rubber plastic & non-metallic mineral products down 19.1 per cent; and computer, electronic, electrical & optical products down 18.8 per cent.

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