NI Chamber and BDO survey shows further signs of recovery but rising price pressures emerge in Q1
13 April 2021
The latest Quarterly Economic Survey (QES) for Q1 2021 suggests some signs of recovery in the Northern Ireland economy during the first quarter of 2021, particularly in manufacturing, but with still some way to go to recover all of the lost ground precipitated by the COVID-19 pandemic. After the severe collapse experienced in Quarter 2 2020 following the onset of the COVID-19 crisis and effective lock down of the Northern Ireland economy, almost all key indicators have continued to improve in Q1 2021.
However, many key balances remain negative meaning that there are still more businesses reporting falls in domestic and export sales/orders, cashflow and investment than those reporting an increase. In total, 6 out of 11 key indicators in manufacturing and 8 out of 11 in services remain negative. The share of businesses operating at full capacity remains low and fell in both sectors in Q1 21.
The Northern Ireland economy was already in a fragile position entering the crisis according to previous QES findings. However, COVID-19 has caused the worst QES performance on record. The immediate impact of COVID-19 has been much greater than the aftermath of the financial crash in 2008/09.
In Q1 2021 44% of businesses (Q4 20 51%) experienced a fall in domestic (UK) sales over the last 3 months, UK sales remained constant for 36% of members (Q4 20 30%) while 20% saw an increase (Q4 20 19%). The damage to exports has been significant although manufacturers have experienced a stronger recovery in export trade in the most recent quarter. Employment indicators are better reflecting the role of the job retention (furlough) scheme intervention in supporting jobs. Confidence around turnover and profitability is up in Q1 2021 with positive balances in both manufacturing and services for the first time since Q1 2020.
In total. 211 members responded to the NI Chamber of Commerce and Industry Quarterly Economic Survey (QES), in partnership with BDO, for the 1st quarter of 2021. Together they account for
26,000 jobs in Northern Ireland.
The fieldwork for the Quarter 1 survey took place between 18th February and 8th March 2021, around 11 months into the COVID crisis during a period when COVID restrictions were still in place in Northern Ireland for sectors including non-essential retail, hospitality and personal services. This was also 6 weeks into the beginning of new trading arrangements coming into place on the 1st January 2021 following the end of the transition period post-Brexit.