Northern Ireland Composite Economic Index Quarter 2 2021

Date published: 30 September 2021

The Northern Ireland Composite Economic Index (NICEI) Quarter 2 2021 was published today by the Northern Ireland Statistics & Research Agency (NISRA).

NICEI Q2 2021 published
NICEI Q2 2021 published

The key points are:

NI Economic output increased over the quarter and the year.

  • The NICEI indicates that economic output increased by 3.1% over the quarter to June 2021. Meanwhile economic output in the year to June 2021 increased by 22.2% in real terms compared to the same period in the previous year i.e. Quarter 2 2020.
  • It is important to recognise the 22.2% annual growth is from a low base, Quarter 2 2020 was the series low for the NICEI as lockdown measures were introduced to mitigate the spread of COVID-19. Biennial change would be a more meaningful measure, which compares the change between Quarter 2 2021 and Quarter 2 2019 (the previous Quarter 2 before the pandemic). In terms of biennial change, the NI economic output has increased by 0.5% and remains much flatter than annual change 22.2%.
  • The increase in the NICEI over the latest quarter (3.1%) 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.

NI Economic Activity increased at a slower rate compared to UK GDP over the quarter.In terms of biennial change (i.e. growth over two years), NI economic output increased over the period while UK output decreased.

  • Although the measures are not produced on a fully equivalent basis, comparisons with the UK show that UK GDP increased by 5.5% over the quarter and experienced similar growth as NI over the year; 23.6% for the UK to Quarter 2 2021 and 22.2% for NI. Regarding Biennial change (i.e. Quarter 2 2021 vs. Quarter 2 2019) UK experienced a 2.9% reduction in output compared to NI’s 0.5% increase in output over the same period.

Both the Public and Private sector increased over the quarter and the year.

  • NI’s Private sector output as measured by the NICEI increased over the quarter (3.9%), over the year (30.4%) but fell (0.1%) on a biennial basis. Meanwhile, the NICEI Public Sector index increased over the quarter (0.3%), over the year (0.6%) and on a biennial basis (2.5%).
  • For the Private sector, average growth for the four quarters to Quarter 2 2021 compared to the previous four quarters increased by 4.3%. Whilst the Public sector (employee jobs) index increased by 0.9% over the same period.

Commentary.

  • The NICEI indicates the increase in economic growth over the quarter, year and rolling annual average [1] to Quarter 2 2021 was due to positive contributions from all sectors and was driven by the growth in the Services sector. By comparison, biennial growth, which compared growth between Quarter 2 2021 and Quarter 2 2019 (i.e. the previous Quarter 2 before the pandemic) was driven by positive growth in the Public and Construction sectors which offset negative contributions in both the Production and Services sectors. Quarter 2 2021 was generally characterised by an easing of lockdown restrictions, a number of the restrictions were announced at the end of December 2020 and extended on a number of occasions during Q1 2021.
  • Economic activity had increased gradually in recent years following the prolonged downturn post 2007 up to the onset of the pandemic. The quarterly growth to Quarter 2 2021 is the second highest rate on record for the NICEI. Furthermore, in Quarter 2 2021 NI Economic Output has returned to levels last seen at the end of 2019 (i.e. Pre pandemic).
  • While not fully equivalent, the NICEI estimates of output in NI and the ONS estimates of UK GDP show that both economies increased over the quarter by 3.1% for NI and 5.5% for the UK. That said, NI economic output increased at a similar rate as the UK over the year at a rate of 22.2% for NI and 23.6% for UK.  NI economic output fared better than the UK in terms of biennial growth (Quarter 2 2021 vs Quarter 2 2019) increasing 0.5% and over the rolling annual average, (comparing the last four quarters to the previous four quarters) increasing 3.5%. Conversely over the same periods the UK experienced declines of 2.9% and 0.6% respectively.
  • The level of economic activity in NI currently sits 4.9% below the maximum value recorded in Quarter 2 2007 whilst UK GDP is estimated to be 11.6% above its pre-economic downturn peak.

[1] The average of the most recent 4 quarters compared to the average of the previous 4 quarters.

Notes to editors: 

1. The statistical bulletin and associated tables are available on the NI Composite Economic Index page of the NISRA website.

2. The NISRA Northern Ireland Composite Economic Index (NICEI) is a quarterly measure of the performance of the Northern Ireland (NI) economy based on available official statistics.

3. The NICEI combines existing published quarterly indices (i.e. Index of Services (IOS), Index of Production (IOP), Quarterly Construction Enquiry (QCE)), public sector employee jobs data from the Quarterly Employment Survey (QES), and unpublished agricultural output data from the Department of Agriculture, Environment and Rural Affairs (DAERA).  These indices are weighted using ONS Regional Accounts Gross Value Added (GVA) data to provide a proxy measure of total economic output in the NI economy on a quarterly basis.

4. The NICEI output measures relate to the second quarter (April - June) of 2021. These estimates are based on surveys of businesses and estimates of change are subject to sampling error. Figures for a quarter may be revised if more complete information subsequently becomes available.

5. The NICEI back series is calculated each quarter, typically the revisions to the NICEI are reasonably minor.  The revisions this quarter were more noticeable, further information is available in the detailed statistical bulletin on the NISRA website.

6. This report will be of interest to Ministers, policy makers, public bodies, the business community, banks, economic commentators, academics and the general public with an interest in the local economy.

7. Further information and tables from each of the data sources are available on the NISRA website.

8. For media enquiries, please contact the DfE Press Office at pressoffice@economy-ni.gov.uk.

9. Follow DfE on twitter and NISRA on twitter.

9. The Executive Information Service operates an out of hours service for media enquiries only between 1800hrs and 0800hrs Monday to Friday and at weekends and public holidays. The duty press officer can be contacted on 028 9037 8110.

9. Feedback is welcomed and should be addressed to Responsible economist: David Leonard, Economic & Labour Market Statistics Branch (ELMS), David.leonard@nisra.gov.uk  Tel: 028 9052 9385.

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