NICEI Report Finds Slight Increase In NI Economy

The economy in Northern Ireland grew by 0.9% in the last quarter of 2015, compared to the same period in 2014.

The number was revealed in the latest NI Composite Economic Index (NICEI), which was published today by the Northern Ireland Statistics & Research Agency.

The reports key findings include:

• Over the last year the Northern Ireland economy was estimated to have grown by 0.9% from Quarter 4 (October – December) 2014 to Quarter 4 2015. The increase was driven by rises in the Services sector (a contribution of 1.0 percentage points (pps)), the Production sector (a contribution of 0.3 pps) and the Construction sector (a contribution of 0.2 pps).

• However, the increases in Private sector output were offset by a decrease in the Public sector jobs index (a contribution of -0.6 pps) over the year.

Economic output increased by 0.4% in the fourth quarter of 2015

• Over the most recent quarters, the NICEI results indicate that NI economic activity increased by 0.4% from Quarter 3 (July – September) 2015 to Quarter 4 2015, with the Services sector again having the largest contribution to growth (see Annex A for details).

NI growth rates lag behind those of the UK

• Although the measures are not produced on a fully equivalent basis, comparisons with the UK show that the NICEI grew at a slower rate over the quarter (0.4%) compared to UK GDP (0.6%).

• Similarly, UK GDP grew by 2.1% over the year to Quarter 4 2015, whereas NI economic output increased by 0.9%.
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• Looking at economic output over the last two years, average GDP growth for the four quarters to Quarter 4 2015 for the UK was 2.3% compared to the previous four quarters. The NI growth rate was 1.4% over the same period, which was an improvement on the NI growth rate for the previous year (0.7%).

• The UK has reported GDP growth in each of the last 12 quarters, whereas the NICEI has reported growth in eight of the last 12 quarters. The NICEI is currently 3.1% above the minimum recorded in Q3 2012 whereas UK GDP is 13.9% above the minimum value (since the pre-downturn peak of Q1 2008) recorded in Q2 2009. This continues to suggest that NI has had a much slower recovery than that of the UK as a whole.

Falls in public sector jobs offset private sector growth over the medium term

• The NICEI Private sector index reported growth over the year of 2.0% from Quarter 4 2014 to Quarter 4 2015. However, the Public sector reported a fall of 2.4% over the same period.

• Annual average growth in the Private sector was 2.3% over the latest four quarters compared to the previous four quarters. The Private sector index also grew by 0.7% over the quarter to Quarter 4 2015.

• The Public sector jobs index has been impacted by the Voluntary Exit Scheme (VES), currently being implemented by the Northern Ireland Civil Service, which will see a reduction in the number of public sector employees. NISRA is currently assessing the use of public sector expenditure as a proxy for public sector output as part of planned improvements to the NICEI series.

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