10 hours ago
- Business
- Belfast Telegraph
‘Uncertainty ahead': Northern Ireland's economy shrinks in first quarter of 2025
The Northern Ireland Composite Economic Index (Nicei) indicated that economic output dropped by 0.6% between January and March.
However, the index from the Northern Ireland Statistics & Research Agency (Nisra) also said output had increased by 1.6% over the year.
And it had grown by 2.7% on a rolling four quarters basis to March 2025.
Overall, Northern Ireland's economic output is now 10% above the pre-pandemic level seen in the final months of 2019, Nisra said.
It said the contraction in early 2025 had been driven by a fall in activity in the construction sector and in the production sector over the three months.
However, over the year, all sectors had grown, with the services sector – which covers everything from restaurants to law firms – the biggest driver of growth since the pandemic.
And while economic output had dropped here over the quarter, it had increased by 0.7% in the UK.
However, over the year, Northern Ireland's 1.6% was stronger than the 1.3% growth experienced in the UK.
And our 10% growth in economic activity since the pandemic was stronger than the growth of just 4.1% in the UK as a whole.
Over the first quarter, private sector output had dropped by 0.9%, though it had increased by 1.9% over the year. Output in the private sector is now 10.5% above pre-pandemic levels recorded in the final months of 2019.
And the Nicei public sector employee jobs index had grown by 0.3% over the quarter and by 0.7% over the year.
Overall, economic activity in Northern Ireland had increased in 24 of the last 40 quarters.
Richard Ramsey, professor of practice in economics and policy at Queen's University, said the Nicei had confirmed a 'reversal in fortunes' for the private sector.
'Continued growth within the public sector and agriculture failed to compensate for declines in output for both industrial production, mostly manufacturing, and construction.
'Services activity, the economy's largest sector, saw output flatline. It was interesting to note that 2024's annual growth rate was revised upwards from 2.2% to 2.7%.
'Outside of Covid-19, which saw freak increases and decreases in economic activity due to implementation of/lifting lockdowns, 2024 marked the strongest rate of economic growth since 2006, when there was a 3.2% increase year on year.'
But he warned that US President Donald Trump's tariff policy announcements of April 2 meant there was now little room for complacency – though a delay in the implementation of tariffs is due to end on July 9.
Mr Ramsey said: "The latest figures for Q1 2025 pre-date Donald Trump's 'Liberation Day' which announced widespread tariff increases and unleashed uncertainty.
'As a result, economic growth forecasts have been scaled back.
'The local economy is expected to see a growth rate of around one-third of last year's figure.
'That marked slowdown will be felt.
"With the pause in Trump's tariffs set to expire in the next two weeks, it remains to be seen what Trump plans to do next.
"One thing is certain, more uncertainty looks set to prevail for the rest of the year".
