NI economy shrank by 0.1% in third quarter of 2017

By John Campbell
BBC News NI Economics & Business Editor

image copyrightPacemaker
image captionProduction at the JTI factory was wound down last year before the plant finally closed in October

The Northern Ireland economy shrank slightly in the third quarter of 2017 with the closure of the JTI factory likely acting as a drag on growth.

The NI Composite Economic Index (NICEI) showed economic output contracted by 0.1% compared to the previous quarter.

The services and construction sectors showed growth but the manufacturing sector shrank.

The manufacturing subsector, that includes tobacco production, saw its output fall by more than 18%.

Production at the JTI factory was wound down last year before the plant finally closed in October.

Ulster Bank economist Richard Ramsey said: "If the JTI tobacco plant hadn't closed the private sector and overall composite index would be signalling positive growth."

House building

The services sector, which is the largest part of the economy, showed quarter-on-quarter growth of 1% while construction grew by a similar amount.

Detailed figures for the construction sector show that the volume of work reported in the third quarter of 2017 was the highest level reported in the last five years.

House building was at its highest point since 2011 with output up by 3.7% compared to the previous quarter and almost 15% higher compared to the same quarter in 2016

Nisra, the official statistics agency, said the NICEI shows that economic output in Northern Ireland has remained relatively flat over the quarter but increased by 1.2% over the year.

Ulster University economist Esmond Birnie said Northern Ireland output "still languishes 6% down on its peak level 10 years ago before the recession - whereas the UK has gained an extra 10% in the same period.

"Any restored regional government would have its work cut out to reverse such deep-set trends of low performance."

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