Just 24 new cars were registered in Northern Ireland last month – helping show the economic damage being wrought by virus crisis

In March and April they have become the earliest indicator of the economic impact of a lockdown.

Last month was the first full month of the UK’s lockdown. It was therefore inevitable that NI’s mammoth 56% year-on-year (y/y) drop in new car sales would be eclipsed in April. And so it has proved.

With dealerships shuttered for the entire month of April just 24 new cars were registered last month. Presumably these were delivered privately to their new owners.

This marked a 99.4% fall relative to April 2019 when 4,060 vehicles were sold. These subdued sales will reduce the flow of stock into the second hand or ‘used’ car market in due course.

2020 has seen Northern Ireland’s new car sales market go from bad to worse.

Prior to the pandemic local dealerships posted their weakest January and February sales figures since the Society of Motor Manufacturers and Traders (SMMT) began collecting the data over 25 years ago.

So the motoring industry was already experiencing challenging times before the Covid-19 health emergency and associated lockdown kicked in.

Not surprisingly NI new car registrations have had their worst start to a year on record. Car sales in both NI and the UK are down 43.4% y/y for the first four months of the year. Taking the last 12 months of sales, Northern Ireland dealers have sold 42,517 new cars.

This is already 9% lower than the car sales trough in the last recession (46,794 in the 12-months to April 2012).

While the scale of the latest decline was expected it is the implication of the statistic that is important. No sales mean no income. Meanwhile fixed costs remain alongside wages.

It is also worth noting that wages within many sales occupations from furniture stores to the housing market are determined by sales activity.

No or low sales activity will mean lower incomes. Other sectors such as the hospitality industry will have witnessed similar declines in sales activity in April.

• Richard Ramsey is chief economist for the Ulster Bank in Northern Ireland