As far as economic output is concerned, 2020 has been a year of extremes. Record rates of decline in Q2 followed by record rates of expansion in Q3. Lockdown restrictions have had the effect of turning economic activity off and on. However, as the pandemic has progressed, subsequent lockdowns have been less severe on economic activity than the first. Many businesses have been able to adapt and function throughout lockdowns or pivot into new markets. The trajectory of economic output has largely followed a bungee jump. The initial fall and rebound will be the most extreme, but subsequent declines and rebounds will moderate. Not surprisingly, the latest Industrial Production and Index of Services (private sector only) from NISRA revealed further declines in output in Q4 2020. These two indices account for the vast majority of Northern Ireland’s Composite Economic Index. Given the scale of the declines revealed today, it is inevitable that the Composite Economic Index (a proxy for GDP), when published next month, will post a sizeable contraction.
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