Coronavirus: NI economy ‘declining at a much slower rate’

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AFP

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Lockdown forced many businesses, such as non-essential retail and restaurants, to temporarily close

Economic output in Northern Ireland continued to decline in June but at a much slower rate, an Ulster Bank survey has suggested.

The bank conducts a monthly survey of a representative sample of about 200 firms.

In April and May the survey had its worst ever results as lockdown forced many businesses to temporarily close.

The June survey suggested manufacturing returned to growth while other sectors saw less dramatic falls in output.

Ulster Bank chief economist Richard Ramsey said there were signs of an improving trend as the lockdown eases.

“April, the first full month of lockdown, marked the all-time low with rates of decline in output easing in May,” he said.

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Ulster Bank

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Richard Ramsey is the chief economist at Ulster Bank

“A loosening in the lockdown restrictions in June has seen this trend continue. Indeed, last month was the first time in eight months that any sector returned to growth.”

Every month, the bank asks businesses about things such as new orders, exports and staffing.

This is used to create a numerical index with readings of more than 50 indicating expansion and under 50 indicating contraction.

In April, the headline seasonally-adjusted business activity index was just 8.3, the May figure was 18.9 while the June figure was 42.6.

Some analysts suggest that the reliability of these types of surveys have been impacted by the extreme economic conditions caused by the pandemic.

The survey respondents are supposed to reflect how business conditions have changed compared to the previous month.

As parts of the economy reopen this should show strongly positive results as sectors like non-essential retail go from no activity to some activity.

However results which point to continuing declines in activity, even after reopenings, suggest that some respondents are instead making a comparison with pre-pandemic levels of business activity.

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