V-shaped recovery still not complete across north's services and manufacturing sectors

The switch by firms such as Magherafelt's Bloc Blinds to PPE production saw some areas of the north's manufacturing sector outperforming 2019 levels. Picture by Mal McCann.

NORTHERN Ireland's services and manufacturing sectors have bounced back significantly from the first lockdown of 2020, but by-and-large, output was still below pre-pandemic levels during the second quarter of 2021.

Output in the services sector grew by 5.5 per cent between the first and second quarters of 2021, according to the Index of Services, published by the NI Statistics and Research Agency (Nisra) on Thursday.

The report revealed a record 29.2 per cent increase from the second quarter of 2020.

The collapse in activity in the wake of the March 2020 lockdown has resulted in many sections of the north's services and production sectors recording unusually high annual increases.

Despite the V-shaped recovery over the year, the services sector was still 1.2 per cent below output before the outbreak of Covid-19.

Nisra's Index of Production, which records activity across the north's manufacturing sector, was up by a more modest 1.1 per cent into the second quarter and 27.6 per cent up on last year's lockdown lull.

But again, output across the sector as a whole was below pre-pandemic levels, albeit by just 0.7 per cent.

However, Ulster Bank's chief economist, Richard Ramsey, said a closer analysis of the north's manufacturing industry revealed that six of the ten sub-sectors are now operating at a higher output than before the pandemic.

He said the manufacturing sector's response to the pandemic, namely switching production to personal productive equipment (PPE), saw output in the textiles sub-sector grow by 27 per cent between the end of 2019 and the second quarter of 2021.

Production of chemicals and pharma products rocketed by 19 per cent over the same period, while the output of rubber and plastics firms grew 16 per cent.

Meanwhile, the north's mining the quarrying sector grew by an eye-watering 43 per cent between the end of 2019 and second quarter of 2021.

However, some sections of the north's manufacturing sector continue to feel the severe impact of Covid-19.

The transport equipment sector, which includes the sizeable aerospace and bus production sector in the north, remained 44 per cent below pre-pandemic levels in the second quarter of 2021.

Richard Ramsey said it highlighted the “severe challenge” for aerospace in Northern Ireland, adding that the sector will need a furlough extension until global industry picks up again.

Production of computer, electronic, electrical and optical products was also down 14 per cent on pre-pandemic levels, while output for ‘other services', which includes the arts, leisure and close contact services like hair dressing, was 19 per cent below the fourth quarter of 2019.

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