NI growth slows and the Province slips down the rankings, a sharp contraction in productivity but the unemployment rate the best in the UK by some way

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For the 12 months ended December 2019, a nowcast published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that NI growth has fallen from 1.8% to 1.1%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the Province eighth (previous ranking second) and suggests the NI economy has not performed well relative to the other eleven parts of the UK. Over the same period UK growth was 1.4%; growth in London (ranked first) was 3.3%; and growth in the East Midlands (ranked twelfth) was 0.1%.

The latest official ONS figures for an earlier period are more mixed. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the nine English regions and Wales. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before the ESCoE estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier. These more volatile figures showed that NI grew by 1%, down from 1.3% growth the previous quarter. This placed the country fourth (previous ranking ninth) out of the twelve UK ‘regions.’

London topped the table with growth of 4.5% whilst UK growth over the same period was 1.4%. The NW was the worst performer and contracted by 0.7%, one of three ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to June 2019 was slightly better for NI than the previous quarter. The Province’s economy grew by 0.4% in April to June 2019, following growth of 0.3% in January to March 2019.

This placed the country fifth (previous ranking sixth) out of the twelve UK ‘regions’. Six regions of the UK saw their economies contract as did the UK overall by 0.2%. The WM was the worst performer in Q2 with -1.6% whereas London was the best with +1%.

In this period, the Province’s services sector grew by 0.4%, production by 0.2% and the public sector by 0.1%. Construction was a drag at 0.3%.

Productivity

Like most regions of the UK, output per hour in NI was below the UK average. Productivity in the Province was 15.6% under the norm which ranked the region tenth in the UK.

Two regions had productivity above the UK average in 2018, London +31.6% and the South East +9.1%. These regions record high levels of hours worked and their elevated productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.

NI moved up the rankings to seventh in terms of output per job. This means that on average workers in NI worked longer hours for each job compared with the UK average. The region’s 11.4% below the UK average compared with London at 40.5% above.

In terms of growth in output per hour, six regions of the UK expanded. NI was ranked eleventh as output per hour contracted by 2.0%. At 2.3% growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK growth was 0.5%.

Sectorally, productivity in accommodation/service activities was better than expected but the deviation from forecasts in non-manufacturing and agriculture was a UK outlier.

On average, in 2018 the UK economy produced about £35 of value for each hour worked, with finance and insurance top at c£69 per hour compared with accommodation and service activities productivity at c£17 per hour.

Labour

More data from the ONS showed unemployment in NI fell by 1,000 to 21,000 between October and December; the drop of 0.1% moved the overall rate down to a record low of 2.4%, the lowest in the UK. The national rate was 3.8% with the highest rate at 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.1% which compared with 72.4% or 0.9m in employment in the Province; the UK rate was 76.5%.

In December, average earnings in NI fell by £5 to £537 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. NI was ranked eleventh (previous ranking also eleventh).

In the UK overall, average earnings grew by 2.9% or by 1.4% after inflation. After adjusting for inflation, regular pay is now at its highest level since 2000, whereas total pay (which includes bonuses) is still 3.7% below its peak in February 2008.

Housing

NI average property prices in Q4 2019 increased by 0.2% to £140.190; the uplift took the annual increase to 2.5%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.

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