Economic output increases as north avoids ‘technical recession’

The strong performance of the north's services sector saw economic output hit a 13-year high last summer.
Economic output in the north rose in the third quarter, driving mainly by the burgeoning services sector

Output in Northern Ireland returned to growth in the third quarter of 2023, driven mainly by the services sector, which accounts for more than half (52%) of the region’s economy.

And it means the north has avoided what would be termed a technical recession, which occurs when there are two consecutive quarters of contraction in GDP.

Figures in the latest NI Composite Economic Index, published by Nisra, show that economic output in July, August and September increased by 0.6% (in the UK as a whole it dipped by 0.1%), and was up by 2.2% over the year.

And output - which increased by 1.7% on a rolling four quarters basis to September - is now 6.2% above the pre-pandemic level seen in the final quarter of 2019.

But the report points to challenging conditions remaining for households and businesses in the north, who are adjusting to the upward shift in price levels for goods and services and the higher interest rate environment.

The increased economic activity during the third quarter was driven by a strong performance from the services sector (up 0.8%), with the public sector and the private construction sectors increasing by 0.2% and 0.1 per cent respectively.

Where the north's economic growth came from in the third quarter of 2023 (Gary)

But the growth in activity was partially offset by decreases in output in production (down 0.3%) and agriculture (down 0.1%).

Worryingly, output in the north’s production sector has now declined in four consecutive quarters.

The public sector (employee jobs) index increased by 1.0% over the quarter, by 2.0% over the year, by 1.8% on a rolling four quarter basis and by 6.9% compared to pre-pandemic levels.