Business

|North's business activity grows along with costs

Ulster Bank's Northern Ireland chief economist Richard Ramsey said the private sector has had an encouraging start to the second quarter of 2017
Ulster Bank's Northern Ireland chief economist Richard Ramsey said the private sector has had an encouraging start to the second quarter of 2017 Ulster Bank's Northern Ireland chief economist Richard Ramsey said the private sector has had an encouraging start to the second quarter of 2017

APRIL saw the strongest rise in business activity of the year-to-date, but costs continue to rise sharply according to the Ulster Bank’s latest Purchasing Managers’ Index (PMI).

The report, which monitors regional economic trends shows an encouraging start to the second quarter of 2017, reflected in faster rates of growth in activity, export orders and employment.

Service providers posted the sharpest expansion in activity for a year, while manufacturing production also rose at a stronger pace. Construction activity was broadly unchanged over the month.

The report also revealed the rate of job creation was its sharpest in ten months

On the price front however both input costs and output charges continue to rise sharply, with manufacturers the most acutely affected.

Chief economist for the Ulster Bank Richard Ramsey said that in spite of political uncertainty the results were largely positive.

“Northern Ireland’s private sector has had an encouraging start to the second quarter of 2017," he said.

"Inflationary pressures remain a challenge though, with sterling’s recent bout of weakness pushing costs higher. Input cost inflation remains most acute for manufacturers. But retailers and service sector firms are far from immune, seeing their cost bases increase at the fastest rates since September 2008 and March 2011 respectively."

He added:

“In terms of the wider services sector, its recovery has been rather subdued of late. However, April’s PMI survey reveals a marked improvement in conditions. Service sector output hit a 12-month high, whilst new orders and employment hit 13-month and 7-month highs respectively. Outside of services, manufacturing activity remains relatively buoyant, but construction firms saw activity stagnate and new orders contract in April.

“Overall, despite the ongoing uncertainty with Brexit, Northern Ireland’s private sector firms remain confident about growth prospects for the year ahead. However, they are not as optimistic as their counterparts in Great Britain.”