Economy: North's services sector hit record levels in final months of 2022
THE north’s economy looks to have emerged out of recessionary territory in the final months of 2022, driven by the improved performance of the services sector.
New analysis published by the Northern Ireland Statistics and Research Agency (Nisra) point to the services, manufacturing and retail sectors all outperforming the UK in the final three months of 2022.
The north entered a technical recession in the third quarter of last year, after the NI Composite Economic Index recorded two successive quarters of decline.
The index, which is a similar measure to GDP, is largely made up of the services, production and retail indexes published on Thursday.
It suggests an improved end to the year for the private sector here.
Services, which accounts for the largest part of the Northern Ireland economy, had a strong end to the year.
The index of services hit a record high in the fourth quarter (Q4), finishing 6.2 per cent above the pre-pandemic level from Q4 2019, while UK service output remained 1.1 per cent below its Q4 2019 level.
The major growth appears to have come from the sub-sector Nisra classes as ‘other services’, which increased by 13.6 per cent in Q4 and 26 per cent during the whole of 2022.
Crucially it includes residential care and private healthcare, which is experiencing a significant uptake due to the huge backlog in waiting lists within the public health system.
It also lists human health activities and personal services, understood to span everything from cosmetic and dental treatment to physiotherapy and hair salons.
Some economists also point to the cross border dimension.
Unlike the 2008 financial crash, retailers and services businesses in the north appear to be enjoying the benefits from having one of the EU’s strongest performing economies just down the road.
And while retail has not recovered to pre-pandemic levels, it saw improvements in Q4 2022 as the wider UK retail index slipped further into decline.
Elsewhere, the index of production, which charts the performance of the north’s manufacturing sector, recorded a small decline toward the end of last year.
But it still outperformed the UK index.
There was a very mixed picture sector-by-sector, particularly in pharmaceuticals, where the pandemic boom has completely worn off.
The manufacture of pharma products rocketed during 2020, largely on the back of the massive government contracts awarded to Randox in Co Antrim.
But the subsector experienced a slump in 2022, ending far below the UK.
The index suggests the north outperformed the UK in a number of areas, including the manufacture of food and drink and textiles,
It also shows the ‘engineering and allied industries’ sector performing very well in 2022, at a time when the same sub-sector was in decline in the UK a whole.