North's private sector fails to soar after March slowdown
THE north's private business sector saw a mild spike in growth last month, but it was far from the rebound expected, the latest PMI figures show.
The April data from Ulster Bank Northern Ireland PMI revealed a mild acceleration in private sector business activity growth, but it did not hit the heights expected after the March blip, heavily impacted by the inclement weather.
All four sectors covered by the survey recorded expansions in activity, and the rate of growth was above the UK average, while new orders continued to increase in April, albeit only marginally quicker than March's 17-month low.
Services was the fastest growing sector in April, but still well below pre-downturn levels. Manufacturing is holding up well relative to its long-term average, despite slowing last month, while construction saw business activity close to stagnation and order books falling for the second month in a row. Retail has seen a significant slowdown in activity and new orders since the turn of the year, with inflationary pressures taking their toll.
In spite of the lower than expected business activity growth, optimism for the year ahead has increased, with retail the only sector to report a slide in business confidence for the year ahead
As has been the case in every month since February 2015, employment increased again, with rising workloads prompting businesses to recruit new staff. That being said capacity pressures continue, with backlogs of work rising for a tenth straight month. Firms in the north also experienced further cost rises in April, with input price inflation rising at a higher level than recorded the previous month and businesses reporting a further marked increase selling charges.
Unfavourable exchange rate movements, higher energy prices and wage increases were also cited as factors driving up company operating expenses.
Ulster Bank chief economist, Richard Ramsey said the latest data showed the March figures were more than just a "weather-related blip".
“The March PMI saw a slowdown in growth resulting from factors including the Beast from East weather episode and it was anticipated that there would be a rebound in April. The latest report shows that this has indeed come to pass. However it has been a more muted one than expected in Northern Ireland and the UK as a whole, unlike the Republic of Ireland which has rebounded with vigour. This suggests that the slowdown in Northern Ireland is related to underlying issues, rather than just a weather-related blip."