NI economy: Services falter as manufacturing grows
- Published
Northern Ireland's manufacturing sector has outperformed the UK average.
Output in Northern Ireland's service sector shrank by 0.3% in the second quarter of the year, suggesting some parts of the economy are slowing.
Retail sales fell by an estimated 2.4% compared to the first quarter, which may reflect the squeeze on household budgets.
However, the manufacturing sector, which is less reliant on local sales, saw output expand by 0.6%.
Food manufacturing had a particularly strong quarter with output up by 6.2%.
The service sector is the largest part of the Northern Ireland economy and had bounced back strongly from the impact of the pandemic.
Output reached a record high in the first quarter of 2022, partially helped by a strong housing market.
However, that recovery now appears to be slowing: output in business services and finance was down by 0.2% compared to the first quarter, while the transport, storage and communications sector saw output fall by 0.5%.
The broad retail and hospitality sector saw output expand by 0.7%, but the weak retail sales figures suggests growth was concentrated in hospitality.
The manufacturing sector has also recovered from the pandemic and has outperformed the UK average.
In the second quarter of the year, output in NI manufacturing was 5.5% above the pre-pandemic level seen at the end of 2019, while UK output was still 0.1% below its pre-pandemic level.
Figures which estimate the output of the total Northern Ireland economy in the second quarter are due to be published at the end of this month.
Retail customers 'cutting back'
Meanwhile, UK retailers John Lewis and DFS have said customers are cutting back on the amount they spend due to the rising cost of living.
John Lewis said while shopper numbers were higher than last year, customers were spending less and avoiding buying as many "big ticket" items.
The company reported a loss of £99M for the first half of its trading year.
The department store chain does not have any branches in Northern Ireland but does deliver from its online business.
Meanwhile, sofa retailer DFS Furniture reported slumping annual profits due to a dip in consumer spending, saying order numbers had "softened markedly" as shoppers tightened their belts.
Also on Thursday, fashion chain H&M reported lower-than-expected quarterly sales, but said it had seen a "better start for the autumn collections than last year".