Saturday, January 22, 2011

Northern Ireland mired in recession: economist

Northern Ireland mired in recession: economist*

20 January 2011

Northern Ireland is still "mired in recession" with rising unemployment and low private sector output keeping the economy in the doldrums, it has been claimed.

Low output was the dominant theme of the Government's latest index of services, production and construction, on the same day it emerged that numbers claiming unemployment benefit in December went up to 58,500.

And a construction bulletin from the Department of Finance and Personnel showed output from building firms between June and September last year was 11% lower than the same period in 2009.

While output from production industries did creep up by 1% in the third quarter, the Department of Enterprise, Trade and Investment said the production sector still showed a "considerable decline" of 11% from its peak in 2008.

On the plus side, the sectors of food, drink and tobacco, engineering, chemicals and chemical products and leather, textiles and textile products, all increased.

Ulster Bank chief economist Richard Ramsey said: "This recession-proof industry posted a 5.2% quarter on quarter rise in quarter three, and this took output to a new record high."

But overall: "Clearly with private sector output plumbing new lows and unemployment continuing to rise, Northern Ireland remains firmly in recession."

Even though there was some recovery in private sector output, he said: "It is clear that output has risen by just 0.1% from its trough in the second quarter of 2010.

"Therefore private sector output in the third quarter of 2010 remains a hefty 12.4% below the 2007 quarter two peak.

"Furthermore the level of private sector output suggests that quarter four 2010 will show a further decline in private sector output."

Meanwhile, services sector output in the third quarter fell by 0.6% and by 0.4% year on year, mainly due to falls in business services and finance.

Mr Ramsey said: "The overall take-away is the service sector in Northern Ireland remains mired in recession before the full force of public expenditure cuts arrive."

He added: "Business services and finance output remains a staggering 40% below the 2007 quarter two peak."

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