THE north's private sector has recorded its slowest rate of growth in almost two years, according to the latest PMI report.
The September survey, produced for Ulster Bank by IHS Markit, shows that business activity, new orders and employment all increased at weaker rates across all sectors, while sentiment dropped to the lowest level ever recorded, with local firms now the least optimistic in the UK about the year ahead.
The latest figures paint a sorry picture of the north's private sector with business activity the worst recorded since October 2016, order books at their lowest level in 23 months and job creation growth at a rate not witnessed in 22 months. It is a similar outlook in relation to export orders, which plummeted to a 25-month low.
Both input cost and output price inflation remained elevated in September, but continued to ease at the end of the third quarter. That being said firms in the north are raising prices at a faster rate than their counterparts in the rest of the UK, according to the data.
Ulster Bank chief economist for Northern Ireland, Richard Ramsey said the latest figures marked a significant comedown for the north's private sector.
“September marked Northern Ireland’s slowest rate of private sector growth in 23-months, considerably behind that recorded at the beginning of the third quarter. This meant that Northern Ireland slipped down the UK rankings from being the fastest growing private sector in the UK in July to being second from bottom in September," Mr Ramsey said.
“This slowdown isn’t entirely unexpected, given that July received a significant weather-related boost, and taking the quarter as a whole, the deceleration looks more modest. However, the July-September period still marks the slowest quarterly rate of private sector growth that Northern Ireland has seen in five quarters. In addition, Northern Ireland’s poorer performance at the end of the quarter relative to the rest of the UK can’t be explained solely by the weather, given that July’s sunshine was a UK-wide phenomenon."
In relation to the lack of optimism among Northern Ireland firms, Mr Ramsey cited Brexit as a "major concern" for respondents.
“Concerningly, all sectors experienced a slowdown in September in terms of activity, orders and job creation. However, all sectors are still in growth mode, for now at least, and manufacturing is still outperforming relative to its long-term average. Inflationary pressures have also shown signs of easing. However, what does or doesn’t happen regarding Brexit will exercise Northern Ireland businesses in the quarters ahead and looks set to continue to impact on both confidence and activity," he added.
