Northern Ireland’s economy has largely recovered from the Covid crisis, but long-standing issues remain
ECONOMIC output in Northern Ireland has largely returned to pre-pandemic levels, but the latest release of government data highlighted the weakness of the economy before Covid-19 hit.
The Northern Ireland Composite Economic Index (NICEI) showed a 3.1% increase in production between the first and second quarters (Q2) of 2021.
The index, which is Northern Ireland’s closest measure to measure its GDP, said second-quarter economic output was 22.2% up from the same quarter last year.
Recent growth has been largely driven by the northern service sector, which rebounded 2.8 percentage points as restrictions on hospitality and retailing were eased in the second quarter.
The service sector was worth around £ 22 billion to Northern Ireland’s economy before the pandemic.
While production is almost back to where it was at the end of 2019, the economy is still 4.9% below levels seen in our last recession in 2007/08.
The latest quarterly growth is also lagging behind the performance of the UK as a whole.
Ulster Bank chief economist Richard Ramsey said that while the overall economy is showing close to fourth-quarter 2019 output, the recovery in the private sector is not yet over.
“More than 97% of the decline in private sector production following Covid-19 has been recovered to date.
“But securing the last three percent of the recovery in terms of pandemic production loss will be more difficult.”
Despite the launch of the £ 145million High Street Scheme this month, consumer spending is still expected to decline in the final period of 2021, amid rising costs of living and the energy crisis emerging, while a larger supply chain disruption is likely to be taking place. the brakes to a wider pickup.
“It is also important to remember that the economy of Northern Ireland did not experience strong growth in 2019,” said Mr Ramsey.
“Private sector output grew only 0.7% year-on-year in 2019. This rate of growth is compatible with a recession.
“So going back to 2019 levels doesn’t come in a particularly great place. “
The economist said the latest official figures highlighted another long-standing problem in Northern Ireland, the persistent underperformance of productivity and high value-added jobs.
“Northern Ireland produces the same value of private sector output in the second quarter of 2021 as it did almost 16 years ago.
“But almost 82,000 additional private sector employees were added to produce the same output value,” he said.
“Job creation has not been a challenge for Northern Ireland. Create jobs with high added value in sufficient quantity.