North’s economy outperforms rest of UK, official figures show

Region’s third-quarter GDP only 0.3% below pre-pandemic levels, according to experimental new data

The economy of Northern Ireland has largely recovered from the hit of the Covid-19, marking the best performance across all UK nations and regions, according to experimental official statistics that point to it prospering under the Northern Ireland protocol.

Economic output in Northern Ireland in the third quarter was only 0.3 per cent below that of the final quarter of 2019, before the pandemic, according to data published by the Office for National Statistics on Monday.

The region performed better than any other in the UK and surpassed the country’s overall economic recovery, which fell 2.1 per cent over the same period.

London was the second best performing area, with output 1.8 per cent down on pre-pandemic levels, closely followed by Wales.


In contrast, economic output in the West Midlands was still nearly 10 per cent below pre-pandemic levels.

Jonathan Portes, professor of economics at King’s College London, said it was “plausible that Northern Ireland has done better”. Under the protocol, the region is effectively still part of the EU single market and has preferred access to both the EU and Great Britain.

Separate official statistics released last month showed that Northern Ireland was the only region in the UK with growing imports in the first half of the year, compared with the same period in 2020.

However, its exports by value contracted at a faster rate than those of England, but were still stronger than Scotland and Wales.

“Northern Ireland has a large public sector which has helped to protect its economy during the pandemic,” said Richard Holt, an economist at Oxford Economics.

‘Wide regional gaps’

Holt added that he was not surprised London was one of the better performing parts of the country thanks to a large share of staff that were able to continue to work from home, compared with other regions.

While many jobs in consumer-facing services were lost in the capital during successive Covid-19 lockdowns, higher productivity jobs mostly continued with employees working from home.

In contrast, the West Midlands, which is reliant on the manufacturing sector, has been particularly badly hit by supply problems, especially the global chip shortage and lower demand for cars.

Ruth Gregory, an economist at the consultancy Capital Economics, said the “wide regional gaps highlight the risk that the pandemic could deepen the regional divergence and will only fuel the debate on tackling geographical inequalities and levelling up”.

However, the ONS said the experimental data should be treated with some caution as they are “subject to a degree of uncertainty”. The figures follow attempts by the ONS to provide more timely regional data.

The “confidence intervals”, or range of estimates, published by the ONS for the latest data are large, meaning that the exact trend could differ to that suggested by official figures, statisticians cautioned.

Gemma Rabaiotti, ONS head of quarterly regional GDP, said: “London’s economy tends to exhibit greater cyclicality compared with the UK overall.”

She added that the new model might not be as accurate as that used to calculate older data, but “we think it provides useful insights and early information about changes in the economy across the UK”.

Portes said that he was not sure whether the results showed “a real effect”. – Copyright The Financial Times Limited 2021