NI Composite Economic Index

The latest economic output statistics confirm that the Northern Ireland economy was growing strongly in Q2 ahead of the EU referendum result. The Northern Ireland Composite Economic Index expanded at its fastest rate (+1.0% q/q) in almost three years in Q2 2016 and hit its highest level in over 6 years. However, this overall headline performance conceals divergence between the private and public sectors.  While the former remains in expansion mode the latter continues to reduce its headcount in the face of public spending pressures. Continue reading

Would hard Brexit mean a hard landing for agri-food?

The first hundred days is seen as a critical time in politics. Coined in a 1933 radio address by Franklin D Roosevelt, it is often used to measure the successes and accomplishments of a president during the time that their power and influence is at its greatest. Chief Executives of companies also view their first hundred days as a period in which their authority has to be asserted and their intentions known. Continue reading

Chart of the Month – Economic Surprise Index


More than three months have passed since the UK’s EU Referendum result. Since then we have become all too familiar with three words “Brexit means Brexit”. The economic impact to date could also be summed up in three words: better than expected. The Citi Economic Surprise Indices measure data surprises relative to market expectations.  A positive reading means that data releases have been stronger than expected.  Conversely, a negative reading means that data releases have been worse than expected. During the month of May the incoming UK economic data was much weaker than market expectations, hence the negative readings with the Surprise Index.  However, following the EU referendum on 23rd June there has been a steady stream of better than expected data. Indeed, the UK Economic Surprise Index recently hit a three-year high. Economic indicators ranging from the labour market to retail sales have exceeded the consensus opinion amongst analysts in recent months. While economic conditions following the post-Brexit vote have not been as bad as feared, it is too early to draw any firm conclusions on the economic impact from Brexit.  After all, Brexit hasn’t taken place yet and the UK remains in the EU. Furthermore, we don’t have any clarity on what type of Brexit deal the UK Government envisages or what the EU will accept.

Sterling taking a pounding but will we be trumped by inflation?

When people cast their EU Referendum vote on June 23, I suspect not many would have seen it as a ballot on the price they would pay for their next iPhone. But, in a sense, it was, as the proceeding fall in the value of the pound Sterling has had wide-ranging impacts for the economy – both good and bad – including the price we pay for goods. Continue reading

Output declines for first time in 15 months

Ulster Bank Northern Ireland PMI infographic July 2016

Today sees the release of July data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by Markit – signalled that the month following the UK’s vote to leave the EU saw declines in output and new orders in Northern Ireland. The weakness of sterling following the referendum also led to a sharp acceleration of cost inflation. On a more positive note, employment continued to increase and companies were able to secure greater new export business. Continue reading

Chief Economist’s Weekly Brief – Wait and see

The first full post-referendum week was nothing if not eventful. Financial markets were volatile and uncertainty about economic policy has jumped. We await tomorrow’s publication of the Financial Stability Report and yet another opportunity for the Bank of England’s policy makers to offer their views. Continue reading