Economy report

Composite Economic Index continues to rise

Northern Ireland’s Composite Economic Index (CEI) for quarter two of 2019 saw growth in the region continue upwards, with boosts in both growth and performance in the private and public sectors a particular highlight.

The Composite Economic Index is a quarterly measurement of Northern Ireland’s economic performance measured by use official statistics such as the Index of Services, Index of Production, Quarterly Construction Enquiry, the public sector job data from the Quarterly Employment Survey and unpublished official data from the Department of Agriculture, Rural Affairs and the Environment.

The CEI enjoyed rises on both quarterly and yearly bases in Northern Ireland, the rises being 0.3 per cent and 1 per cent respectively. The quarterly increase was driven by rises in the services sector (0.4 per cent), the production sector (0.2 per cent) and the public sector (0.1 per cent); it was, however, slightly offset by a fall of 0.3 per cent in the construction sector.

This decrease in the construction sector saw the total volume of construction output in the second quarter of 2019 fall by 5.6 per cent on a quarterly basis, and by 1.5 per cent on a yearly basis, according to the Northern Ireland Construction Bulletin. The decrease was driven by a 6 per cent slump in repair and maintenance work and a 2.8 per cent decrease in new work. Q2 2019 did, however, see an increase in infrastructure work of 2.4 per cent, while there were further decreases in housing and other work, which fell on a quarterly basis by 10.7 per cent and 5.6 per cent respectively.

Overall, the CEI has continued an encouraging recovery from its nadir of Q2 2013, now lying 7.4 per cent above the level set then and higher than it has been since 2008, but still 4.5 per cent shy of the CEI’s peak in Q2 2007. Annualised growth over the last four quarters also rose by 1.5 per cent having been -0.1 per cent in the two years leading into Q2 of 2018.

Private sector output saw a rise of 0.2 per cent over the quarter and a yearly increase of 1 per cent. The private sector’s own CEI for the year 2018 rose 1.3 per cent on the year and is now at a higher point that it has been since 2009, but is still 4.6 per cent lower than its zenith, also in Q2 2007. The 1.3 per cent rise continued the upward trend in annual private sector growth since 2014: 1.6 per cent in 2014, 2.5 per cent in 2015, 3.0 per cent in 2016 and 0.4 per cent in 2017.

The Public sector jobs index increased by 0.5 per cent over Q2 2019, with it increasing by 1 per cent on a yearly basis. Its average growth over the year also increased by 0.8 per cent.

Northern Ireland’s economic activity grew at a rate faster than the UK’s gross domestic product over the quarter, but slower over the year overall. A quarterly output increase of 0.3 per cent bettered the UK’s fall of 0.2 per cent, but the yearly increase of 1 per cent was less than the annual increase of 1.3 per cent enjoyed by the UK. Over two years, however, the gap closes, with growth in Northern Ireland’s output being 1.5 per cent, compared to UK growth of 1.7 per cent. This two year growth rate to Q2 2019 was an improvement to the two rate to Q2 2018, which was a fall of 0.1 per cent.

In Q2 2019, UK GDP has been estimated to be 12.9 per cent higher than it had been in its pre-economic downturn peak of Quarter 1 2008. The CEI findings that Northern Ireland still hasn’t returned to its pre-recession levels are further proof to the fact the UK both suffered a shorter downturn and enjoyed a faster recovery than Northern Ireland.

Show More
Back to top button