Northern Ireland service sector shrinks but manufacturing picks up

Hospitality is one of the areas that has slowed down, Nisra says

Northern Ireland's services sector contracted in the second quarter of this year as demand fell for consumer services, official figures suggest.

Output was down by 0.8% compared to the first quarter but was still 1.5% 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.

Meanwhile, growth in the manufacturing sector picked up.

It expanded by 1.9% over the quarter and by 3.4% over the year.

The figures, from the statistics agency Nisra, suggest that the slow down in services was limited to retail and hospitality with other parts of the services sector still growing.

Slowdown in hospitality

The retail and hospitality sector shrank by 0.4% over the quarter; separate figures show that retail sales increased slightly, suggesting the slowdown was concentrated in hospitality.

Meanwhile business services, which includes law, accountancy and management consulting, continued to grow strongly.

Output in that sector was up by 1.3% over the quarter and 9.2% over the year.

The growth in manufacturing was driven by the engineering subsector with output jumping by almost 10% in a quarter and by 25% compared to a year ago.

Further analysis shows growth was greatest in the machinery and equipment sub-sector with output expanding by almost 20% in a single quarter.

That subsector, which largely covers a manufacturing cluster in mid Ulster, has expanded in eight of the last 10 quarters.

UK's lowest disposable income

Average disposable income in Northern Ireland rose by 4.5% in 2021 as the economy recovered from the impact of the pandemic, official figures suggest.

That was the largest percentage increase seen in any UK region, according to Office of National Statistics (ONS) data.

However at £17,636, Northern Ireland still had the lowest average disposable income among the 12 UK regions.

The ONS figures are an assessment of what the average person has available to save or spend after tax and benefits.

The UK average in 2021 was up by 3.6% to £21,679; London is the region with by far the highest average of £31,094.

The ONS said that in general, those areas that saw the largest decreases in disposable incomes in 2020 showed larger increases in 2021, as they returned to a more normal level.

Disposable incomes in Northern Ireland had fallen by 0.5% in 2020.

In Northern Ireland, the average in 2021 ranged between £19,223 in Lisburn and Castlereagh down to £16,572 in Derry City and Strabane.

The firm provides IT infrastructure to customers such as global investment banks and hedge funds

Meanwhile, on Thursday it was announced the financial technology firm Options was creating 200 jobs with the expansion of its Belfast office.

The business currently has about 250 employees in the city.

The firm provides IT infrastructure to customers such as global investment banks and hedge funds.

Chief executive Danny Moore said there was "exceptional talent" in Belfast and the last two years had seen the firm's largest-ever intake of new graduates and placement students.

The new jobs will be added over the next three years.

Mr Moore said the firm has "widened its recruitment net" to include engineering apprentices and "talented individuals" who have completed their A-Levels.

He added that over a quarter of new hires in the last 12 months have been placement students.

Options also has operations in London, New York, Chicago, Toronto, Paris, Singapore, Hong Kong, and Auckland.