North saw sharpest fall in business activity for seven years in November
NORTHERN Ireland underwent the sharpest fall in business activity in seven years, a new survey out today suggests.
The latest Ulster Bank purchasing managers index (PMI) found that output in the north's private sector fell for the ninth successive month in November, with the rate of contraction accelerating to the fastest pace since 2012.
The latest analysis said Brexit uncertainty continues to be the main factor for the decline.
New orders at businesses in the north also fell to a seven-and-a-half year low.
Produced by IHS Markit, the survey is considered a reliable and up to indicator on the state of the north's economy.
It's based on the responses of 200 private companies across the manufacturing, construction, retail and services sectors.
Ulster Bank's chief economist said that despite the steady decline across many sectors, the north's labour market continued to display resilience last month, with many firms maintaining staffing levels despite a big fall-off in demand.
However he said the four areas of the private sector measured by the index have shown falling input in each of the last seven months.
“The performance of retail and construction are of particular concern," he said.
"Construction order books continued to shrink for the 15th month in a row and November marked the sharpest rate of decline in 92 months.
“It is a similar story for retailers with orders falling at their fastest pace since March 2009.
“In this environment, firms' desire to maintain staffing levels comes at a cost to profit levels. The latest survey shows that input price inflation continued to rise in November, but firms are not able to pass these increased costs onto their customers and indeed discounting is widespread in an attempt to generate new business.”
The economist said that businesses in the private sector appear willing to take a hit to their profits in the short-term in the hope that conditions will improve once there is greater certainty around Brexit.
“Indeed, their expectations for the year ahead are relatively upbeat overall with an expectation that business conditions will have improved marginally in 12-months' time; albeit that this is largely confined to manufacturing and services,” said Mr Ramsey.
“This may well prove to be overly optimistic however as even if a Brexit deal is passed there is still much to be decided around the new relationship with the EU and how any new arrangements would work.
“Uncertainty will therefore continue to be very much present in 2020.”