The Northern Ireland Composite Economic Index (NICEI) Quarter 4 2021 was published today by the Northern Ireland Statistics & Research Agency (NISRA).
The key points were:
NI Economic output increased over the quarter, year, 2 year and rolling four quarters
- The NICEI indicates that economic output increased by 1.2 per cent over the quarter to December 2021. Meanwhile economic output in the year to December 2021 increased by 4.9 per cent in real terms compared to the same period in the previous year ie Quarter 4 2020.
- Where annual growth in the NICEI appears particularly strong, it is important to recognise there has been some volatility in the NICEI during the COVID pandemic. As lockdown measures were introduced to mitigate the spread of COVID-19 and subsequently eased, this lead to the NICEI falling to a series low in Q2 2020, followed by the highest quarterly increase in the NICEI to Q3 2020.
- As a result, it is perhaps worth considering biennial change, comparing the change over two years ie Quarter 4 2021 and Quarter 4 2019 (the previous Quarter 4 before the pandemic) as opposed to annual change in order to mitigate any volatility arising from the pandemic in the NICEI. In terms of biennial change, NI economic output has increased at a slower rate (3.4 per cent) compared to the annual change (4.9 per cent) in the NICEI to Q4 2021. Furthermore, in Quarter 4 2021, NI Economic Output reached a 13 year high, returning to levels of economic output last exceeded in Q2 2008.
- The increase in the NICEI over the latest quarter (1.2 per cent) was largely driven by increased activity in the Services sector; which had positive contributions of 0.7 percentage points (pps). That said, all other sectors had positive contributions, with Production contributing 0.2 pps, Construction and the Public Sector both contributing 0.1 pps each.
NI Economic Activity increased at a faster rate compared to UK GDP over the 2 year and rolling annual average periods
- Although the measures are not produced on a fully equivalent basis, comparisons with the UK show that NI Economic Activity increased at a lower rate to UK GDP over the quarter (1.2 per cent vs 1.3 per cent) and the year (4.9 per cent for NI and 6.6 per cent for the UK). However NI output grew at a faster rate than UK GDP biennially (ie over 2 years, 3.4 per cent vs 0.0 per cent) and over the rolling annual average period ie the average of the most recent 4 quarters compared to the average of the previous 4 quarters (7.6 per cent vs 7.4 per cent).
Both the Public and Private sectors increased over the quarter, year, 2 year and rolling four quarters
- NI’s Private sector output as measured by the NICEI increased over the quarter (1.4 per cent), over the year (5.8 per cent) and on a biennial basis (3.5 per cent). Meanwhile, the NICEI Public Sector index also increased over the quarter (0.7 per cent), over the year (2.2 per cent) and on a biennial basis (2.9 per cent).
- For the Private sector, average growth for the four quarters to Quarter 4 2021 compared to the previous four quarters increased by 9.5 per cent. Whilst the Public sector (employee jobs) index increased by 1.4 per cent over the same period.
- The NICEI indicates the increase in economic growth over the quarter, year, 2 year and rolling annual average1 to Quarter 4 2021 was largely driven by increased activity in the Services Sector
- The Index of Services (which accounts for 53 per cent of NI GVA) reached its series high in Q4 2021 - exceeding the previous series high achieved in the previous quarter, Q3 2021. It is also worth noting in Q4 2021 that none of the remaining sectors of the NI economy (Production, Construction or Public Sector) made a negative contribution to NICEI growth over the quarter, biennial or rolling four quarter period. That said, the construction sector experienced a reduction in output over the year to Q4 2021, while the remaining sectors experienced growth over the period. This lead the NICEI and Private Sector Component Indices to reach a 13 year high in Q3 2021, returning to levels of output last exceeded in Q2 2008
- There has been a general relaxing of restrictions from Q2 2021 through to Q1 2022 (albeit with some restrictions re-introduced at the end of Q4 2021). Economic activity had increased gradually in recent years (2013-2019) following the prolonged downturn post 2007. Recently the NICEI and Private Sector Component Indices have recovered from their respective series lows in Q2 2020 (which coincided with a period of strict lockdown restrictions) and have returned to levels of economic output last exceeded in Q2 2008.
- 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 1.2 per cent for NI and 1.3 per cent for the UK. NI economic output increased at a slower rate than the UK over the year at a rate of 4.9 per cent for NI and 6.6 per cent for UK. Conversely, NI economic output fared better than the UK in terms of biennial growth (Quarter 4 2021 vs Quarter 4 2019) increasing by 3.4 per cent whilst the UK showed no growth. Over the rolling annual average, (comparing the last four quarters to the previous four quarters) NI grew at a faster rate than the UK, increasing by 7.6 per cent whilst the UK grew by 7.4 per cent.
- The level of economic activity in NI currently sits 1.1 per cent below the maximum value recorded in Quarter 2 2007 whilst UK GDP is estimated to be 15.4 per cent 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 at 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 fourth quarter (October - December) 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 available at the NI Composite Economic Index page of 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 Economy page of the NISRA website.
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