Six months on, but what can we expect next?

Six months on from the first COVID case in Northern Ireland, even the most pessimistic forecaster would not have predicted the whirlwind that has hit the economy in that period. We haven’t received the official confirmation, but there is little doubt that Northern Ireland has experienced its fastest, deepest recession on record. The government induced lockdown saw aspects of the economy – including car sales, which saw a 99.4% decline in April – grind to a halt and many other aspects severely disrupted.

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Statistical fog remains but younger generations are clearly bearing the brunt of COVID-19

The furlough fog continues to obscure the true employment / unemployment picture within Northern Ireland’s labour market statistics. Together the Job Retention Scheme (JRS) and the Self-Employment Income Support Scheme (SEISS) have provided unprecedented financial support to over 316,000 workers in Northern Ireland.  That equates to 37% of total employment. At its peak, 240,200 employees were on furlough (JRS) during the lockdown period with 76,000 self-employed benefiting from assistance. Since the economy reopened, a significant proportion of these workers (as yet unspecified) have returned to work. Another sizeable cohort will remain on furlough until the scheme expires in October. Only after the scheme has ended will we get a much clearer view of the true state of the labour market. Needless to say there will be a significant rise in unemployment and fall in employment.

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Chief Economist’s Weekly Brief – Back in the black

Global output returned to growth for the first time since January. July was a pivotal month for the PMI surveys with a surge in the number of economies crossing the expansion (>50) threshold. The US, Eurozone, UK, the Republic of Ireland and Northern Ireland PMIs all returned to growth last month for the first time since COVID-19 struck. Notable absentees still stuck in the red (contraction) include Brazil, India, Japan and Scotland. 

Negative And Positive Thinking. Optimism or pessimism is a personal choice. Friendly or aggressive attitude
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Business activity returns to growth in July

Today sees the release of July data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – showed that companies in Northern Ireland increased their output amid signs of a recovery being underway following sharp falls earlier in the year. New orders also returned to growth, but employment continued to decline and firms were often required to lower selling prices in order to secure new work.

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Car market revving up again with best July in 13 years

With the worst quarter on record for new car sales behind them, local dealerships finally enjoyed their first lockdown-free month in July. Following a 76% y/y decline in Q2, showrooms reported 4,398 new car sales last month. That represented a 17% increase on the corresponding month a year ago and marked the largest number of sales in five months. More importantly, it marked the best July for new car sales in 13 years according to the SMMT figures.  

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Chief Economist’s Weekly Brief – Uncomfortably numb?

Q2 GDP fell off a cliff. Yet months of shocking headlines has made record declines feel somewhat “normal”. They’re not. What is creating a stir is the rising number of hotspots locally as well as globally. The battle with the virus is going to be long, drawn out, and fraught with unpalatable trade-offs, especially between lives and livelihood.

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