North's food and drink manufacturing sector considerably outperforming GB

Output in the north's food and drink manufacturing sector grew by 6.2 per cent in the second quarter, eight time the UK rate.

NORTHERN Ireland’s food manufacturers are considerably outperforming their counterparts in Britain, new official data suggests.

Output by food and drink firms here increased by 6.2 per cent between the first and second quarters of 2022, almost eight times the UK rate of 0.8 per cent for the same period.

That’s according to the latest Index of Production, compiled by the Northern Ireland Research and Statistics Agency (Nisra).

It showed output by food and drink manufacturers increased by 13.9 per cent between the second quarter of 2021 and the second quarter of 2022.

The UK growth rate for the same period was 3.1 per cent.

Work by the Economic and Social Research Institute (ESRI) in Dublin previously linked the significant upsurge in cross-border trade within the food and drink sector with the introduction of the Northern Ireland Protocol.

Ulster Bank's chief economist, Richard Ramsey, said the north's food producers have benefited from the Protocol since it came into force at the start of January 2021.

"Local firms have experienced increased sales to the Republic of Ireland (EU) at the expense of GB producers.

"Since the NI Protocol came into effect, food and beverages output amongst NI manufacturers has increased by 18.3 per cent, which is 2.5 times the comparable growth rate amongst UK firms."

Another sub-sector to experience a considerable upsurge in output is the north’s waste and recycling sector. It finished the second quarter 25.3 per cent higher than 12 months earlier.

Overall, Northern Ireland’s Index of Production increased by 0.5 per cent between the first and second quarters of 2022, leaving it 3.9 per cent up over the year, almost twice the UK’s annual rate (two per cent).

Nisra said the index hit a ten year high in Q2, finishing the second quarter 6.5 per cent above the pre-Covid-19 pandemic level from Q4 2019.

By contrast the UK was 1.2 per cent down on Q4 2019 in the second quarter.

However, separate analysis published by Nisra on Thursday showed Northern Ireland’s retail and services sectors experiencing a more challenging second quarter.

Services output fell by 0.3 per cent between the first and second quarters, while retail output here decreased by 2.4 per cent.

Accounting for the greatest part of Northern Ireland’s economy, services includes everything from hospitality to financial services.

While down in the latest quarter, the index is still 2.7 per cent up over the year and broadly performing in line with the UK performance over the year.

In fact, services output in Northern Ireland is now 4.4 per cent above the pre-pandemic level from Q4 2019, while UK services output is 1.2 per cent up over the same period.

Meanwhile, Covid-19 lockdowns aside, retail output in Northern Ireland during the second quarter of 2022 hit its lowest level since the start of 2014.

The 2.4 per cent drop in the Northern Ireland Retail Sales Index between the first and second quarters was also sharper the 1.4 per cent for the UK as a whole.