Decline may be hard to believe, but it's consistent with our manufacturing woes

Press/Media: Expert Comment

Description

Article in Belfast Telegraph describing economic statistics (gross value added or output, and trade data) published by ONS and NISRA on 12 December 2018.

Subject

https://www.belfasttelegraph.co.uk/business/analysis/northern-irelands-falling-sales-to-gb-consistent-with-manufacturing-woes-37621443.html

 

 

 

Every year, a couple of weeks before Christmas, the UK statistics body- the Office for National Statistics (ONS)- publish the latest figures on the size of the UK economy as well as the size of each of the regional economies. We will have an obvious interest in the figures relating to Northern Ireland in particular. Additionally, on Wednesday, the Northern Ireland Statistics and Research Agency (NISRA) published the latest data on the trading performance of the Northern Ireland economy.

 

 

 

Are these figures a cause for pre-Christmas cheer or depression? Well, the results are quite mixed and some of the figure do need to be handled with care.

 

 

 

Taking the ONS data, first the good news. Total output in both the UK and Northern Ireland economies continued to grow last year. Up by 1.9% in the UK and 1.7% in Northern Ireland. The latter result is an average for the whole of Northern Ireland. The ONS data suggest a marked variation across Northern Ireland’s Council areas. The Causeway Coast and Glens recorded bumper growth of 9.1% and Mid and East Antrim a decline of 6.1%. A qualification is in order- data at the Council area include a higher degree of estimation and may be less reliable. The Mid and East Antrim probably does reflect the impact of the JTI plant closure.

 

 

 

Northern Ireland continues to be one of the lowest output (gross value added) per head UK regions: £21,172 in 2017 compared to a UK average of £27,555. Admittedly, both Wales (£19,899) and the North East of England (£20,129) were even lower. Returning to the sub-regional data, the Belfast City Council area has an apparently very good result in that it was placed in top 5 local authority areas across the UK in terms of output per head. That result was based on a very strong “commuter effect”: much of the apparently high output per person generated in the Belfast city area was actually produced by people commuting in from other Council areas. Conversely, the very low measured output per head in Ards and North Down was either a mistake or a result of residents commuting out to other areas.

 

 

 

A more sobering result was in terms of output growth since 2009. The entire Belfast City Region (that is, Belfast plus the five other Councils for the purposes of the City Deal bid) registered gross value added growth of 9.5% compared to 13% in  the Cardiff City area, 13.7% in the Edinburgh City area and 28.4% in the Greater London Authority area. Similarly, growth in Derry~Londonderry lagged behind that in most GB cities over the last decade.

 

 

 

Governments and economists often tell us that if we want to get richer we must export and sell more outside of our region. Hence the great interest in the Broad Economy Sales and Export Statistics produced by NISRA for 2017. 

 

 

 

One rather negative shock is just how much sales from Northern Ireland to GB declined during 2017. If the NISRA figures are taken at face value these declined by £2.9bn to £11.3bn. A percentage decline of about one-fifth may be hard to believe but this is consistent with the closure of the sales intensive cigarette plant (JTI). It is also consistent with the latest NISRA data showing that turnover of the Northern Ireland manufacturing sector dropped by about £2.4bn.

 

 

 

At the same time, Northern Ireland businesses may have overcome some of the Brexit uncertainties and benefitted from a relatively low sterling exchange rate to increase total exports- that is, sales beyond the UK- by £0.5bn to £10.1bn. Sales to the Republic Ireland were up by about £0.5bn to £3.9bn but those to the rest of the EU declined by about £300m to £2bn. Exports to the world beyond the EU grew by about £200m to £4.3bn.

 

Period13 Dec 2018

Media contributions

1

Media contributions

  • TitleDecline may be hard to believe, but it's consistent with our manufacturing woes
    Degree of recognitionRegional
    Media name/outletBelfast Telegraph
    Media typePrint
    Duration/Length/SizeThird of a page
    CountryUnited Kingdom
    Date13/12/18
    DescriptionBelfast Telegraph article
    Producer/AuthorEsmond Birnie
    PersonsEsmond Birnie