Business

Output growth quickens to three-month high says PMI report

Northern Ireland's private sector saw an increase in economic output during May, according to Ulster Bank's monthly PMI survey of firms that tracks indicators such as new orders, employment and exports.

“Faster growth is the main theme of the latest PMI, with business activity, new orders, and employment all seeing their respective indices rising at increased rates in May," the bank's regional chief economist Richard Ramsey said.

"This is particularly the case for the services sector, which was the biggest riser for the second month in a row."

He said that the most positive aspect of the May survey was the continuing increase in export orders, which are growing at their fastest rate this year and, significantly, well above their long-term average.

"Clearly, firms are capitalising on buoyant export markets, most notably the Republic of Ireland and the US, as well as the favourable exchange rate.

“But on the flip side, the UK is one of the slowest growing economies in Europe, which means that those Northern Ireland firms focused on the domestic market are faring less well.

"Construction orders, for instance, saw just marginal increases, while retailers saw new orders stagnate. Indeed, firms in these two sectors are the least optimistic with regard to the 12-month outlook, and retail confidence is at a 13-month low."

Mr Ramsey said Northern Ireland's political situation and the lack of decision-making will likely have a bearing on sentiment for the foreseeable future in the construction sector, while strong rates of inflation are a key factor in dampening the retail sector's performance, squeezing firms' profitability as well as consumers' ability to spend.

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