NI business turnover dips for first time since 2010 after JTI closure

TURNOVER for businesses in Northern Ireland last year declined for the first time since 2010, new Government figures show.

The Annual Business Inquiry, produced by the Northern Ireland Research and Statistics Agency (NISRA), said the total sales and work done by businesses here during 2017 was worth an estimated £66.6bn (excluding VAT), a 1.7% decrease on 2016.

Ulster Bank chief economist Richard Ramsey said the closure of the JTI tobacco plant in Ballymena with the loss of 800 jobs could have played a major part in the slump. The last packet of cigarettes rolled off the production line in October 2017.

“JTI’s closure distorts the underlying picture experienced by the majority of businesses,” said Mr Ramsey.

“The JTI effect contributed to a hefty 13.5% fall in manufacturing turnover in 2017, bringing turnover down to a seven-year low. Conversely, construction firms saw turnover rise by a similar amount in 2017 to a decade high of £7.5bn.”

Yesterday’s NISRA report estimated that the cost of purchases of goods, materials, energy and services rose to £44.3bn last year, up 3.2% on 2016.

Approximate Gross Value Added (aGVA) in NI was £21.9bn in 2017, an increase of 0.6% (£126m) over the year. GVA is the measure of value added to goods and services, quantifying the productivity of the economy. The 0.6% rise in aGVA was far behind the 5.6% increase averaged across the UK.

Mr Ramsey said the figures show Northern Ireland is lagging behind the rest of the UK.

When adjusted for inflation, he said the 0.6% aGVA increase equated to a 1.6% decline, against a rise in real terms of 3.6% in the UK.

The economist said the data showed the wholesale and retail trade accounted for £5bn — close to one-quarter of NI’s non-financial business economy (in terms of aGVA).

“So NI could be seen as a nation of shopkeepers, or rather wholesalers and retailers.”

NISRA said the key driver in aGVA growth last year was the non-financial services sector, which increased by £388m (4.9%) between 2016 and 2017. The bulk of growth within the sector has been attributed to administrative and support businesses, which increased by £211m (18.1%) over the year.