The Province’s productivity growth outstrips most other regions and unemployment remains the lowest in the UK

Reading Time: 3 minutes

A nowcast for Northern Ireland for the 12 months ended March 2021 which incorporates the second lockdown, published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that the Province’s economy contracted by 10.5%.

This ranked Northern Ireland third in the UK (previous ranking fourth). Over the same period the East Midlands was ‘best’ with a fall of 9.4%, with Wales’s 13.4% contraction the ‘worst’. The UK overall posted -11.8% on the same measure.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, with differing lockdowns, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies.

Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time. This is the last nowcast that will be published by ESCoE with the ONS taking over the running of the model in the future.

ONS GDP to December 2020

Official ONS figures for an earlier period which reflects a mix of continued recovery from the first lockdown but also a slowdown from the second lockdown show the Province’s performance relative to other parts of the UK.

The ONS’s figures for the quarter to December 2020 showed Northern Ireland post growth of 0.7% compared with 15.4% to September 2020.

This placed Northern Ireland eighth (previous ranking tenth) out of the twelve UK ‘regions’. London was top with quarterly growth of 3.1% whilst the East Midlands was bottom, posting growth of -0.8%. UK growth was 1%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in Northern Ireland was stable at 31,000 between March and May 2021; a rate of 3.6%. At 6.5% London was the highest; Northern Ireland had the lowest rate with the UK rate at 4.8%.

The South East had the highest employment rate at 77.7%, this compared with the lowest rate of 70.3% in Northern Ireland where 0.8m are employed; the UK rate was 74.7%.

Public sector employment in Northern Ireland increased by 0.9% to 216,000 in the year to March 2021, which was 25.9% of the workforce, the highest level of public sector employment in the UK which compared to 14.8% in London which was the lowest.

Productivity

ONS figures also showed that in 2020, output per hour worked increased by 3.5% in Northern Ireland which ranked the Province second out of the 12 UK ‘regions’. Productivity growth in 2019 was best in the North West, increasing by 4.6% and fell the most in the West Midlands, decreasing by 1.4%. Overall output per hour worked in the UK increased by 0.4%.

Research and Development

Northern Ireland attracted £0.8bn of R&D spend in 2019, up from £0.7bn in 2018. This ranked Northern Ireland tenth in the UK (previous ranking twelfth). Over the same period the South East did best and secured £7.5bn of R&D expenditure with the North East only attracting £0.7bn.

Overall UK R&D spend rose by £1.3bn (3.4%) to £38.5bn in 2019 – the lowest percentage growth since 2013. Most R&D expenditure was in the business sector at £25.9bn (67% of the UK total), followed by the higher education sector at £9.1bn (24%).

Total R&D expenditure represented 1.74% of GDP in 2019; compared with 1.59% in 2008 and 1.72% in 2018. Overseas funding of R&D increased by 4.1% to £5.6bn in 2019 compared with 2018; this was 0.8% higher than the peak in 2014 of £5.5bn.

Housing

Northern Ireland’s average property price increased by 1.1% in Q1 2021 to £149,178. The uplift took the annual increase to 6%. In comparison, UK prices grew by 0.9% to £254,624, an annual growth rate of 10%.

Leave a Comment

Your e-mail address will not be published. Required fields are marked *