NI economy: Strong first quarter growth for services sector, figures show

The services sector covers a broad swathe of activity including retail, hospitality and business services

Northern Ireland's services sector grew strongly in the first quarter of this year, official figures suggest.

Output expanded by 2.2% over the quarter and was 2.4% higher than the same period in 2022.

Services is the dominant part of the local economy, covering a broad swathe of activity including retail, hospitality and business services.

The sector's output is now at a record high level and is 7.4% above the pre-pandemic level seen at the end of 2019.

Over the quarter business services saw the strongest growth, expanding by 3%.

That was despite a slowing housing market, which will likely have a negative impact on financial and legal services.

Retail sales also showed significant quarterly growth of 3.3%, far above the 0.6% expansion seen in other parts of the UK.

Cross-border shoppers

Ulster Bank chief economist Richard Ramsey said cross-border shoppers from the Republic of Ireland was "a notable factor" in the Northern Ireland retail performance.

Northern Ireland's manufacturing sector also grew in the first quarter of the year, though more slowly than services, expanding by just 0.4% over the quarter and over the year.

The strongest quarterly performance was in chemicals and pharmaceuticals, which expanded by 6.5%. However output is still far below the exceptional peak recorded during the pandemic.

Output of the broader production sector was down by 0.4% over the quarter and 1.9% over the year due to a weaker performance by utilities.

Northern Ireland's economy emerged from a technical recession in the final quarter of last year with overall growth of 1.4%.

The strong performance of the services sector suggests that momentum has been maintained, though it will be offset by mounting cuts and job losses in the public and voluntary sectors.