Northern Ireland economy 'recovered to pre-pandemic output levels'

There are big variations between different sectors of the economy

The Northern Ireland economy recovered to its pre-pandemic levels of output in the second quarter of this year, official figures suggest.

The Northern Ireland Composite Economic Index (NICEI) was up by 3.1% compared to the first quarter and rose 22.2% compared to the same period in 2020.

That took overall output back to the level seen at the end of 2019.

However, there are big variations between different sectors of the economy.

The increase in the NICEI in the second quarter was largely driven by an increase in activity in the services sector which had a positive contribution of 2.8 percentage points (pps).

Production, construction and the public sector also had positive contributions with 0.2 pps, 0.1 pps and 0.1 pps respectively.

In the UK as a whole, economic output grew by 5.5% between the first and second quarters.

The statistics agency, Nisra, which compiles the figures says it is uncertain at this stage, what extent the end of the furlough scheme will have on the Northern Ireland economy.

Nisra also says the impact of Stormont's high street voucher scheme will show up in the quarter four of 2021 which will be published at the end of March 2022.

Private sector output is still slightly below pre-pandemic levels while public sector output is above.

Meanwhile, Danske Bank has revised its annual growth forecast for Northern Ireland in 2021 down from 6.2% to 5.8%.

Chief economist Conor Lambe said the revision partially reflected the growing impacts of supply chain disruptions.

He also pointed to an expectation that some cautious consumer spending behaviour would persist.

He added that it was important to note that growth of 5.8% "would still represent a strong rate of expansion".

The growth forecast for 2022 has been revised up slightly to 4.7%.

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Mr Lambe said he expected the hotels and restaurant sector to show the biggest annual growth of almost 19% in 2021 as they faced some of the toughest pandemic restrictions in 2020.

He expects the labour market recovery to cool as the furlough ends, forecasting that the average annual number of employee jobs in Northern Ireland will decline by 0.6% in 2021, before returning to growth of about 1% in 2022.