Northern Ireland’s food and drink producers have performed markedly better than their counterparts in Great Britain (GB) since the protocol came into effect, latest government data has shown.
The quarterly Index of Production showed local food and beverage output was 13.9% higher in the second quarter of the year compared to the same time in 2021, the largest annual increase in the sector on record, outside the Covid-19 pandemic.
Richard Ramsey, chief economist at Ulster Bank in Northern Ireland, said since the Northern Ireland Protocol came into effect at the start of 2021, food and beverage output is 18.3% higher. That is around 2.5 times the comparable growth rate for the sector in GB.
“Northern Ireland’s food producers have benefited from the NI Protocol which came into force at the start of January 2021,” he said. “Local firms have experienced increased sales to the Republic of Ireland (EU) at the expense of GB producers.”
Meanwhile, the Northern Ireland Composite Economic Index showed the local economy has nearly managed to claw its way back to levels of output comparable to those posted prior to the financial crisis in the second quarter of 2007. While the index had been expected to breach the 15-year-old peak in the second quarter, Mr Ramsey said it may be some time before that is achieved.
“With NI’s largest sector (private sector services) posting a decline of 0.3% q/q in Q2 2022 it now looks like the Q2 Composite Economic Index could be marginally negative too,” he said. “Given the deteriorating economic conditions and outlook since then, Q2 2022 could well mark the first of a series of quarterly contractions as Northern Ireland enters recession and battles with cost-of-living and cost of doing business crises.
“It looks like the quest to return to Q2 2007 levels of output will continue into 2023.”
