Northern Ireland economy grew in first three months of 2022
NORTHERN Ireland’s economy grew in the first three months of 2022, with many sectors fully recovered from the pandemic, official statistics show.
Output in the services sector, which makes up the greater part of the economy, grew 0.7 per cent between the end of 2021 and the start of 2022, leaving it 12.4 per cent higher over the year.
The production sector, which mainly comprises manufacturing, was 0.6 per cent up on the previous quarter and seven per cent up over the year.
While the most recent economic data shows the economy slowing down in May, the analysis from the Northern Ireland Statistics and Research Agency (Nisra) show it was in reasonably good health in the first quarter.
Output in the north’s manufacturing sector was 3.9 per cent above pre-pandemic levels, with food and drink up 11.77 per cent on the fourth quarter of 2019.
It compares with manufacturing in the wider UK, which remained 0.2 per cent below pre-Covid levels. Labour market data published on Tuesday also showed Northern Ireland manufacturers creating jobs at a greater rate than the UK as a whole.
Analysts have pointed to the Northern Ireland Protocol as a potential factor.
The Economic and Social Research Institute (ESRI) in Dublin found in December that a significant uptake in the proportion of goods being sourced north of the border had been driven by the food and drink sector.
Ulster Bank’s chief economist Richard Ramsey said the quarter one Nisra data showed output within the north’s food and drink manufacturing sector increased at four times the UK rate between the end of 2019 and start of 2022.
However, the recovery in manufacturing is not complete, with the transport sub-sector, which includes aerospace, 47.5 per cent down on pre-pandemic levels.
Nisra’s data showed retail sales bounced back well in early 2022, climbing by 2.6 per cent over the quarter and seven per cent over the year.
But the figures point to a sharp drop in car sales and hospitality.
Ulster Bank’s latest PMI this week showed the cost of living crisis caught up with the sector during May, with output well down last month.
Danske Bank’s latest research also revealed inflation significantly dampening consumer confidence of late.
Grant Thornton’s chief economist Andrew Webb said the more recent economic data only served to highlight the dramatic pace at which sentiment has switched since the first quarter.
“The next quarter’s release will be particularly revealing, as we will start to learn if the large increases in input costs, interest rate increases and a nervous consumer, tip the indices downwards or if our businesses can power through.”