BUSINESS activity in the north was the strongest it has been in almost two-and-a-half years at the close of 2016, research has shown.
The highly-regarded Ulster Bank Northern Ireland Purchasing Managers’ Index displayed full marks across the board for business performance in the region, with firms reporting strong figures in every aspect of the survey.
Impressively, for the first time in years business activity in Northern Ireland has improved at a stronger rate than in the UK.
The Ulster Bank index surveys hundreds of leading businesses across the north every month in order to get a glimpse of the overall economic performance.
Total new orders rose at a sharp pace from the second straight month in December, with companies in the north continuing to reap the rewards of the weak pound. This trend was particularly evident in regards to sales coming from the south.
The pace at which new export orders increased was second only to the record figures recorded in November and, with new orders increasing, outstanding business also continued to rise for the third successive month.
Input costs also continued to rise and output prices increased to the greatest extent in more than eight years. Meanwhile, the jobs front had its share of the spoils - speeding up to a three-month high.
Remarkably, retail sales figures for the year's final quarter were at their highest level in the survey's 14-year history. These numbers were given a boost by the strong festive season figures reported by the top high street stores earlier in the week, which benefited from the extra five trading days over Christmas and the always-reliable "Black Friday" shopping frenzy.
While it was a happy picture for the north’s retailers and manufacturers, however, Ulster Bank’s chief economist for the region, Richard Ramsay, pointed out that the seemingly positive reports hid a gloomier landscape in other sectors.
"Both retailers and manufacturers ended 2016 with much stronger sales and orders than they started the year. However, the converse was true for the services and construction industries," he said.
"Indeed, construction firms were in contraction mode in three of the four quarters last year. Meanwhile Northern Ireland’s services sector continues to grow at a rather subdued rate, with 2016 well below the growth rates achieved between 2003 and 2007.
"The Northern Ireland economy begins 2017 with significant momentum, albeit the retail sector is largely driving this growth. However, inflationary pressures and benefit freezes will act as speed bumps for consumer spending and economic growth this year."
Looking back on the year as a whole, 2016 was indeed one of peaks and troughs. Businesses in the region experienced four key phases, broadly corresponding to the four quarters of the year.
In the three months before and after June’s shock referendum vote, there was a slowdown in activity followed by an intial drop in the third quarter. However the year began and ended on a high, leaving predictions for 2017 following much the same theme that dominated the previous 12 months: uncertainty.
