A shrinking economy leads to missing billions: Negative NI growth in Quarter 1 2018
NI output indicated as 0.3% down in Q1 2018. Even more significant the growth wedge NI compared to UK average continues. Here 6% below peak. There up 10%.
19 July 2018
Regarding Thursday’s NICEI (NI Composite Economic Index) economic growth figures, Dr Esmond Birnie, Senior Economist at the Ulster University Economic Policy Centre said,
“In Quarter 1 2018 (January-March) measured total economic output in Northern Ireland remained 6.3% lower than its pre-banking crisis/pre- world recession peak level which was reached at the end of 2006. In contrast, UK GDP in Quarter 1 was 10.5% higher than it was before the recession a decade ago. This encapsulates just how far the Northern Ireland economy is underperforming compared to the UK average. ”
“We had a deeper recession than the UK average at the end of the last decade, the subsequent recovery was slower and weaker, and now there are signs we have moved into reverse gear. If the Northern Ireland economy had grown at the same trend as the UK average during 2007-18, the regional economy would now be about 17% larger than its current size: we would have had billions of extra pounds of resources.”
Thursday’s NISRA figures also showed that in the first quarter of 2018 as compared to the last quarter of 2017 total Northern Ireland output actually fell: by 0.3%. During the same period UK GDP grew by 0.2%.
Over the year to Quarter 1 2018 Northern Ireland output decline by 1% whereas UK GDP grew by 1.2%.
Over the last quarter and the last year the main contributor to output decline at the sectoral level was construction whereas there was moderately strong growth in the service sector. The latter was one of the few rays of light in the results,
If the NISRA NICEI output growth figures are placed alongside the most recent employment growth figures through to March 2018 the implication is that productivity in Northern Ireland actually fell during 2017-18. Something we can ill- afford given that in 2016 measured output per hour worked was only 83% of the UK average.
Senior Economist (Economic Research)
Department of Acc, Finance & Economics
Areas of expertise Economic policy, competitiveness, economic growth and productivity.