Business

NI business activity rises at fastest this year despite uncertainty

New orders and business output grew in Northern Ireland last month at its fastest rate this year according to the latest PMI report
New orders and business output grew in Northern Ireland last month at its fastest rate this year according to the latest PMI report New orders and business output grew in Northern Ireland last month at its fastest rate this year according to the latest PMI report

THE north's private sector continues to defy political and economic uncertainty as new orders and output in September grew at its fastest rate this year.

The latest Ulster Bank Northern Ireland PMI report shows the fastest rise in business activity in the year-to-date, while the rate of job creation also accelerated last month at its sharpest rate since June 2014. The overall expansion was led by the retail sector, with services also seeing a sharp increase in activity.

Manufacturing growth remained solid while construction saw some positive news as new orders increased for the first time in seven months.

Total new business increased substantially in September, with the rate of growth the strongest since last December and the weakness in Sterling has helped firms secure greater volumes of new export orders, with new business from the Republic of Ireland mentioned in particular.

Rising workloads fed through to a further increase in staffing levels. The main driver of employment growth was services, where staffing levels rose at the fastest pace in just over a decade. Despite higher capacity, backlogs of work continued to rise amid strong new order growth.

On the price front companies faced a sharper rise in input costs, the fastest since May, while the rate of output price inflation eased slightly from August.

Chief economist for Ulster Bank Richard Ramsey said local firms are faring better than their counterparts across the UK as a whole at present, with the acceleration in growth contrasting with signs of a slowdown at the UK level.

“Part of the improvement in new business was reflective of continued growth of new export orders. Sterling weakness continues to act as a tailwind for exports, helping firms to secure new work in the Republic of Ireland in particular. The strength of demand across the border and in the euro area in general is also a factor helping new business from outside the local market to increase," he said.

“A key highlight from the latest survey findings was the sharpest rise in employment since mid-2014. This suggests some level of confidence among firms that external factors won’t negatively impact demand too much in the near-term at least. This is supported by data on business confidence which rose to a four-month high in September."

Mr Ramsey added a note of caution that Sterling weakness is a "double-edged sword" for firms.

"While the currency is helping companies to secure new export orders, it is also acting to push up input costs. The rate of cost inflation quickened to a four-month high in September, with strong price rises across all monitored sectors. This, coupled with the aforementioned uncertainty, sounds a note of caution as we head towards the year-end.”

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