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:

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

The Northern Ireland economy grew by 1.6% from Quarter 2 2015 to Quarter 2 2016

Over the last year the Northern Ireland economy was estimated to have grown by 1.6% from Quarter 2 2015 to Quarter 2 2016. The increase was driven by rises in the Services sector (a contribution of 2.0 percentage points (pps)), the Construction sector (a contribution of 0.2 pps) and the Production sector (a contribution of 0.02 pps).
These increases were offset by a decrease over the year in the Public sector jobs index (a contribution of -0.6 pps).

Economic output increased by 1.0% over the quarter

More recently, the NICEI results indicate that NI economic activity increased by 1.0% from Quarter 1 to Quarter 2 2016. This is greater than the growth recorded for the UK for the same period (0.7%). This is the third consecutive quarter where NI quarterly growth has been greater than that of the UK.
The increase in the NICEI over the quarter (1.0%) was driven by increases in the Services sector (a contribution of 0.9 pps), the Construction sector (a contribution of 0.3 pps) and the Production sector (a contribution of 0.1 pps). These increases were offset by a decrease in the Public sector jobs index (a contribution of -0.2 pps).

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

The Private sector index reports growth over the year of 2.9% from Quarter 2 2015 to Quarter 2 2016. However, the Public sector index reports a fall of 2.6% over the same period.
Looking back over a slightly longer timeframe, annual average growth in the Private sector was 2.4% over the latest four quarters compared to the previous four quarters, while the Public sector fell by 2.3% over the same period. The Private sector index also grew by 1.6% over the quarter to Quarter 2 2016 whilst the Public sector decreased by 0.9%.
The Public sector jobs index has been impacted by the Northern Ireland Civil Service Voluntary Exit Scheme (VES). 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.

Pick up in annual growth

When the trend in the Index is considered over the last two years there is some evidence of an improvement in the rate of growth. 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 2 2015 to Quarter 2 2016 was 1.6%.
Annual growth between Quarter 2 2015 and Quarter 2 2016 has been reported in the Construction, Production and Services sectors, whilst the Public sector recorded a decrease over the year. The Services sector made the largest contribution to the overall growth of the NICEI over the year to June 2016.

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 2.1% over the year to Quarter 2 2016, whereas NI output increased by 1.6%.
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 2 2016 for the UK was 1.9% compared to the previous four quarters. The NI growth rate was 1.3% over the same period.

NI quarterly growth greater than that of the UK

Comparisons with the UK show that quarterly growth for NI has exceeded that of the UK for the last three quarters (Quarter 2 2016 NI=1.0% vs UK=0.7%; Quarter 1 2016 NI=0.5% vs UK=0.4%; Quarter 4 2015 NI=0.8% vs UK=0.7%).
The NICEI is currently 5.0% above the minimum reached in Quarter 3 2012, and 7.1% below the maximum value recorded in Quarter 2 2007. In Quarter 2 2016, UK GDP was estimated to have been 7.6% 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 May-July (5.6%) is the lowest rate since November–January 2009 and represents a fall of 0.7 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 6.4% in 2014, down from 7.5% in 2013.
The most recent Quarterly Employment Survey, on the NISRA website, also shows that the number of jobs has increased over the second quarter of 2016 and over the last year to June 2016.
The rate of growth over the year in the NI economy (1.6%) to Quarter 2 2016 continues to lag behind that of the UK (2.1%). However there is some evidence that the rate of growth in NI over the last year (1.6%) has picked up compared to the previous three quarters, reporting the highest annual growth since that recorded in Quarter 2 2015.
In addition, quarterly growth for the last three quarters has been higher in NI compared to that of the UK.

Notes to editors:

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.
The NICEI output measures relate to the second quarter (April-June) 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.
Please note that this release relates to data prior to the EU referendum. The Quarter 3 2016 results (due to be published in January 2017) will be the first time the NICEI will include the post-EU referendum period.
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.
The detailed statistical bulletin is available from the NISRA website.
Further information and tables from each of the data sources are available from NISRA.
For media enquiries, please contact DfE Press Office on 028 9052 9604. Outside office hours, please contact the Duty Press Officer via pager number 07623 974383 and your call will be returned. Follow us on Twitter @Economy_NI
Feedback is welcomed and should be addressed to: Responsible statistician:Chris Ganley,Economic & Labour Market Statistics Branch (ELMS),chris.ganley@finance-ni.gov.uk Tel: 028 9052 9645. Follow ELMS on Twitter - @ELMSNISRA

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