NI economy ‘worst hit in UK’ by coronavirus pandemic

An Ulster Bank survey of new orders and overall business output suggests the economic decline associated with the coronavirus pandemic is worse in Northern Ireland than any other UK region.
By The Newsroom
Published 11th May 2020, 00:01 BST
Belfast city centre, like most other NI towns and cities, has all but completely closed down during the pandemicBelfast city centre, like most other NI towns and cities, has all but completely closed down during the pandemic
Belfast city centre, like most other NI towns and cities, has all but completely closed down during the pandemic

The latest monthly Purchasing Managers Index (PMI) report, produced for Ulster Bank by IHS Markit, shows the most severe contraction of the private sector in Northern Ireland since records began in 2002 — and a steeper downturn than any other part of the UK.

Despite the steep decline, unemployment hasn’t shot up as quickly here as in the rest of the UK, the survey also found.

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Richard Ramsey, the Ulster Bank’s chief economist for Northern Ireland, said it will take years to recover from the damage.

“With a full lockdown maintained throughout April, it came as no surprise that all 12 UK regions posted record rates of decline in output and employment.

“Northern Ireland’s private sector reported an additional raft of record rates of decline with new orders, exports, backlogs and business confidence. Furthermore, the rates of decline in output and new orders amongst local firms were steeper than elsewhere across the UK.”

On employment rates, Mr Ramsey said: “Interestingly, however, Northern Ireland’s rapid rate of decline in employment was not as sharp as most other UK regions. Other survey evidence suggests that Northern Ireland’s uptake of the Job Retention Scheme – and the process of furloughing staff – has been notably higher than the national average.

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“Nevertheless, it is still worrying that even with unprecedented levels of government job support, employment is still falling at a record pace.”

Mr Ramsey said a full recovery is years away.

“Job losses are expected to surge in the second half of 2020,” he said. “Returning to the levels of private sector activity and employment that existed before the pandemic will take years not months.”

He added: “Covid-19 will leave scars on the economy that will last even longer.”

The headline seasonally adjusted Business Activity Index collapsed to 8.3 in April, from 29.1 in March which itself had already signalled a record contraction in output.

Related topics:Ulster Bank