Winter restrictions led to second worst quarter on record for crucial NI services sector

The north's retail and hospitality sector contracted by eight per cent amid the reintroduction of lockdown restrictions late last year. Picture by Mal McCann.
Ryan McAleer

THE north’s crucial services sector recorded its second largest quarterly fall on record in the final three months of 2020, new official data shows.

Two reports from the Northern Ireland Research and Statistics Agency (NISRA) on Thursday confirmed that both the services and production sectors contracted in the fourth quarter of last year, amid the reintroduction of lockdown restrictions.

The services index, which measures the greater part of the private sector in Northern Ireland, saw output shrink by five per cent between the third and fourth quarters.

That’s the second most severe quarterly decline in services activity on record after the 17.6 per cent collapse in the second quarter of 2020 amid the first Covid-19 lockdown.

The sector, which was already in decline before the outset of the Covid-19 pandemic, had bounced back by 22 per cent in the third quarter of 2020.

Some sub-sectors, including financial and business services as well as transport, storage and communications, did witness growth in the fourth quarter.

But the reintroduction of Covid-19 restrictions late last year had a particular impact on the retail and hospitality sub-sector, which shrank by eight per cent from the third to the fourth quarters.

‘Other services’ contracted by 5.2 per cent.

Overall, services output was 6.4 per cent down in Q4 2020 compared with the same quarter a year earlier.

The restrictions had less of an impact on the north’s production sector, which largely accounts for the manufacturing industry.

Output decreased by 0.3 per cent between the third and fourth quarters of 2020, but NISRA’s report found significant variation in performance for the diverse sector.

While the electricity and gas sector fell 0.8 per cent, chemical and pharmaceutical manufacturers hit record output levels in the fourth quarter of 2020.

Textile manufacturers saw a 10.1 per cent quarterly contraction, but the sector, which has been involved in PPE production during the pandemic, was 23.3 per cent up on the same period in 2019.

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