A SLOWDOWN in the private sector saw output in the north’s economy contract by 0.5 per cent between the first and second quarters of 2023, official data suggests.
The Northern Ireland Composite Economic Index (NICEI) revealed output in the private sector shrank by 0.8 per cent in the second quarter of the year, outweighing growth in the public sector and manufacturing between the first and second quarters.
Output in the economy in the second quarter (Q2) was still 1.7 per cent higher than the second quarter of 2022 and 5.8 per cent above the pre-pandemic level seen in the fourth quarter (Q4) of 2019.
But the latest analysis from the Northern Ireland Statistics and Research Agency (Nisra) suggests the economy is slowing down in the face of inflation and the cost crisis.
More recent labour market data and Ulster Bank’s monthly PMI snapshot of the private sector, have both signalled an economic cooling of late.
Nisra’s commentary published with its second quarter analysis states: “The NI economy faced challenging economic conditions last year brought on by acute inflationary pressures, however the local economy has shown resilience with increased economic output in quarter 4 2022 and quarter 1 2023.
“However, the NICEI indicates that there has been a weakening in economic activity during Quarter 2 2023 with a fall of 0.5 per cent over the period.”
Output in the public sector marginally increased by 0.1 per cent between the first and second quarters of 2023, while the production sector, largely comprised of manufacturing output, expanded by 0.3 per cent.
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But that was offset by contractions in construction (0.3 per cent), agriculture (0.1 per cent) and most significantly, the all-important services sector, which contracted by 0.4 per cent.
Prior to the pandemic in 2019, the services sector made up around 52 per cent of the output in the north’s entire private sector.
The services sector includes everything from retail and hospitality to tech, financial services and real estate.
