Statistical Press Release: Northern Ireland Composite Economic Index

The NI Composite Economic Index was published today by the Northern Ireland Statistics & Research Agency. The key findings are that:

Statistical press release

The Northern Ireland economy grew by 0.7% from Quarter 1 2015 to Quarter 1 2016

• Over the last year the Northern Ireland economy was estimated to have grown by 0.7% from Quarter 1 2015 to Quarter 1 2016. The increase was driven by rises in the Services sector (a contribution of 1.2 percentage points (pps)) and the Construction sector (a contribution of 0.2 pps).
• These increases were offset by decreases over the year in the Public sector jobs index (a contribution of -0.5 pps) and the Production sector (a contribution of -0.1 pps).

Economic output increased by 0.4% in the first quarter of 2016

• More recently, the NICEI results indicate that NI economic activity increased by 0.4% from Quarter 4 2015 to Quarter 1 2016. This is the same as the growth recorded for the UK over the quarter.
• The increase in the NICEI over the quarter (0.4%) was driven by increases in the Services sector (a contribution of 0.3 pps) and the Construction sector (a contribution of 0.2 pps). These increases were offset by decreases in the Production sector (a contribution of -0.04 pps) and the Public sector jobs index (a contribution of -0.04 pps).

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

• The Private sector index reports growth over the year of 1.6% from Quarter 1 2015 to Quarter 1 2016. However, the Public sector index reports a fall of 2.2% over the same period.
• Looking back over a slightly longer timeframe annual average growth in the Private sector was 2.3% over the latest four quarters compared to the previous four quarters, where the Public sector fell by 1.8% over the same period. The Private sector index also grew by 0.6% over the quarter to Quarter 1 2016 whilst the Public sector decreased by 0.2%.
• The Public sector jobs index has been impacted by the Voluntary Exit Scheme (VES), which was implemented by the Northern Ireland Civil Service, which sought a reduction in the number of public sector employees. NISRA is currently investigating the appropriateness of public sector jobs as a proxy for public sector output as part of planned improvements to the NICEI series.

Slow down in annual growth

• When the trend in the index is considered over the last two years there is some evidence of a slowdown in the rate of growth. Thus annual average growth over the last four quarters compared to the previous four quarters was 1.3%, whereas annual growth over the last year from Quarter 1 2015 to Quarter 1 2016 was 0.7%.

NI annual 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 UK GDP[1] grew by 2.0% over the year to Quarter 1 2016, whereas NI output increased by 0.7%.
• When the extent of change is considered over the last two years, it can be seen that average GDP growth for the four quarters to Quarter 1 2016 for the UK was 2.0% compared to the previous four quarters. The NI growth rate was 1.3% over the same period.
• The NICEI is currently 3.8% above the minimum reached in Quarter 3 2012, and 7.2% below the maximum value recorded in Quarter 2 2007. In Quarter 1 2016, UK GDP was estimated to have been 7.0% higher than its pre-economic downturn peak of Quarter 1 2008, having first exceeded this peak in Quarter 3 2013. This suggests that the UK has had a shorter downturn with a faster recovery.

Comments

• The Labour Force Survey (LFS) unemployment rate for March - May 2016 (5.9%) represents a fall of 0.4 pps from that of the previous year. Unemployment rates have remained relatively stable over the last two years, centred on an average of 6.1% in 2015 and 6.2% in 2014, down from 7.5% in 2013.
• The most recent Quarterly Employment Survey also shows that the number of jobs has increased over the first quarter of 2016 and over the last year to March 2016.

Endnotes:

1. ONS Quarterly National Accounts, Quarter 1 (Jan to Mar) 2016 (The measure of GDP referred to is the chained volume index of GDP at market prices)

Notes to editors: 

1. The Northern Ireland Composite Economic Index (NICEI) is an experimental quarterly measure of the performance of the Northern Ireland (NI) economy based on available official statistics.
2. The NICEI output measures relate to the first quarter (January - March) of 2016. 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.
3. 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.
4. The detailed statistical bulletin is available from the NISRA website. 
5. Further information and tables from each of the data sources are available from NISRA. 
6. For media enquiries, please contact DfE Press Office on 028 9052 9604. Outside office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.
7. Feedback is welcomed and should be addressed to the responsible statistician: Chris Ganley,Economic & Labour Market Statistics Branch (ELMS), chris.ganley@finance-ni.gov.uk,  Tel: 028 9052 9645.

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