The increase in NI service production in the first quarter of 2022 is welcome

Post-pandemic business activity there remained buoyant in the first three months of the year, with quarterly increases reported in both services and manufacturing, according to a report.

ut While the figures were welcomed and compare favorably to those released UK-wide, analysts have warned that recent reports are revealing the impact of rapidly rising costs.

The year-over-year comparison also includes some months when the pandemic was still dampening activity.

Output, the amount produced over a period of time, within service industries, including transportation, retail and wholesale trade, hospitality and finance, rose 0.7% from the previous quarter , 12.4% over the year and 13.9% over four. quarterly basis.

This compares to UK increases of 0.4% over the three months and 9.9% for the year, according to data from the Northern Ireland Statistics and Research Agency (Nisra).

Production increased by 0.6% over the quarter and 5.6% over the year.

This compares to 1.1% and 2% for the rest of the UK.

Overall, production is now 5.2% above the pre-coronavirus level seen in Q4 2019, while the UK remains 1.8% below its level in Q4 2019. services is 4.9% higher in the last quarter of 2019.

But recent reports, including from Ulster Bank and Danske Bank, show slowing business activity and declining consumer confidence as rising costs and inflation hit across the board.

Andrew Webb, chief economist at Grant Thornton, said: “The dramatic pace at which economic sentiment has changed is evident in the production, services and retail indices, which seem to remind us of better days. past.

“As our focus has shifted to weakening consumer and business sentiment, rising inflation and interest rates, and the key question of whether and when there will be a recession, the achievement of a high series of service production and continuous production growth is a welcome boost.

“In the production sectors, manufacturing continues to increase, mainly driven by food products and engineering activities. Northern Ireland’s economy has key strengths in areas such as food production where a consumer slump doesn’t bite as hard.

“There are a few notes of caution. While the retail trade index recorded an increase, within the services index, the production of wholesale trade, retail trade and hotels fell over the quarter.

“This could reflect that weaker consumer sentiment is now trickling down to reduced activity which may, for now, focus on hospitality.”

The annual increase of 12.4% in the production of services over the year was due to a strong increase in other services, 40.4%, in the transport, storage, information and communications sector. , 14.6%, wholesale and retail trade, 10.3% and business services and finance, 7%. .

During the year, production increased by 12.5% ​​in textiles, leather and related products, food products, beverages and tobacco by 7.3% and engineering and related industries of 3.5%.

But manufacturing of chemicals and pharmaceuticals fell 6.7%, likely due to slower manufacturing of Covid-related products.

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