Faster rise in activity - but new order growth remains modest
THE overall weakness of the UK economy is dragging Northern Ireland down, findings from a monthly business barometer show.
Three regions of the UK, including the key economic drivers of London and the south east, saw output fall in November, and that is having an impact on this side of the Irish Sea according to banker Richard Ramsey.
He was commenting on the latest Ulster Bank PMI report which signalled that growth was maintained in the Northern Ireland private sector in November, with activity rising at a solid pace.
But rates of expansion in output and new orders were weaker than earlier in the year and business confidence remained relatively muted.
The bank's regional chief economist Richard Ramsey said: "The PMI tells us that private sector firms in Northern Ireland remain in expansion mode across a range of indicators.
"This relatively strong end to the year means that 2018 will have been a better 12 months than had been anticipated.
"The latest survey points to rising business activity, expansion in order books, and staffing levels continuing to increase. Indeed, business activity and employment accelerated in November. Manufacturing is the main high-point of the latest survey, recording impressive rates of growth in orders books, employment and output."
But he cautioned: "While continuing growth in the private sector is encouraging, the reality is that the rate of expansion is relatively subdued compared to longer-term averages.
"Indeed, the final three months of the year are shaping up to have the weakest rate of growth in nine quarters. Meanwhile export orders are set to have their weakest rate of growth in 10-quarters. Indeed, in November, the pace of export order growth slowed to its weakest rate since the EU referendum.
"This slowdown is clearly having an impact on sentiment for the year ahead. Business confidence improved in November from October's low, but this was solely due to the services sector.
"Retailers and manufacturers saw their confidence levels hit new lows when looking to the year ahead, while construction firms, which have been experiencing falling output and orders, expect more of the same next year.
"Another factor impacting on confidence in Northern Ireland is perhaps the relatively poor performance of the UK economy, which has experienced a marked slowdown in the fourth quarter.
"The overall health of the UK economy is the most important driver of activity in the Northern Ireland private sector. This trend therefore does not bode well for this region in 2019."