Data Insight: Analysis of NI trade by sector: A focus on the 10X priority clusters

This Data Insight report explores Northern Ireland (NI) trade by sector over the period 2014–2020 with a particular emphasis on 10X priority clusters.

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What we found

After adjustment for inflation, total sales by businesses in Northern Ireland fell by 2.87% over the period 2014 to 2019. However, as purchases fell by more (3.98%) in the same timeframe, total GVA (value added) increased by 14.99%. There is a slight dip in sales, purchases and GVA in 2017, with steady increases observed in the period 2017 to 2020. However, this decline is likely due to weighting issues as a large number of zero entries are noted in that year in the underlying data.

As expected, there is a large decline in sales and purchases during 2020 as a result of COVID-19, though the net impact on real GVA is a reduction of 3.43%. The low rate of decline is likely because of the generous support packages awarded by the government. Subsidies increase total GVA but are not included in sales.

Apart from non-10X manufacturing which experienced a decline in GVA in real terms of 20.35%, all other sectors experienced growth in real GVA over the period 2014 to 2019. All 10X sectors experienced growth in sales, purchases and GVA over the period 2014 to 2019. The strongest performing sectors were software and screen (81.64%), other production (40.40%), construction (33.92%) and agri-tech (32.22%). Sales by two sectors contracted between 2014 and 2019, non-10X manufacturing (47.77%), and wholesale and retail (6.85%). 

Many sectors contracted in 2020 as a result of COVID-19. The construction, professional and technical, and agri-tech sectors suffered the largest drops in overall real GVA. By contrast, the manufacturing, health and life science, advanced manufacturing and software and screen sectors continued to increase overall real GVA. Given the nature of the COVID-19 crisis, it is not surprising that the health and life science sector made gains in 2020. Continued gains in the advanced manufacturing and software and screen sectors suggest resilience in the face of the severe shocks impacting on the overall economy and society at that time.

Why it matters

Our findings suggest that in real terms the Northern Ireland economy has seen contraction in the (non-10X)  manufacturing sector. In this respect, Northern Ireland is probably not that dissimilar to other Western economies where such deindustrialisation was continuing.

Growth by businesses within the 10X sectors, both in terms of scale (sales) and value added (GVA), helped to offset the negative impact of contraction in manufacturing, wholesale and retail over the period 2014-2019. Other non-10X support sectors, such as construction and other services, have also experienced strong gains, perhaps to support the needs of the growing 10X sectors.

Our findings suggest benefits of policies that adopt a targeted approach, especially in terms of promoting advanced technologies.

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