Northern Ireland economy emerged from recession in 2022

Short term economic prospects have brightened in the UK as a whole

Northern Ireland emerged from a technical recession in the final quarter of 2022 with growth of 1.4%.

A technical recession refers to two consecutive quarters of shrinking economic output.

NI Statistics and Research Agency (Nisra) figures suggest output fell by 0.3% in the second quarter of 2022 and a further 0.3 per cent in the third quarter.

The recovery in the final quarter was driven by construction and services.

Northern Ireland's economic output is now 5.6% above pre-pandemic levels and has finally surpassed its previous peak in the third quarter of 2007.

In 2007 Northern Ireland's economy was boosted by a housing bubble.

After that bubble burst economic output fell sharply and only recovered very slowly.

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Nisra said a large increase in activity in the private construction sector coupled with a strong performance in the services sector led to "a sizeable increase in economic activity in the final quarter of 2022".

It said the services sector, which accounts for the majority of output, "continues to have a strong recovery post pandemic and has been the main driver of growth".

'Not off to the races'

In the UK as a whole short-term economic prospects have brightened recently.

Last week the head of the Bank of England has said he is "much more hopeful" for the UK economy after the bank's analysts said the UK was no longer heading into an immediate recession.

However, Andrew Bailey warned that the UK was "not off to the races", with the economy expected to grow only slightly in the coming months.

Improved economic performance does not immediately feed through to improved household finances.

Last month the independent forecaster the Office for Budget Responsibility said that household incomes - once rising prices were taken into account - would drop by 6% this year and next.

Living standards won't recover to pre-pandemic levels until 2027, it warned.