THE north continues to lag behind its UK counterparts in output, orders and employment according to the latest PMI (Purchasing Managers' Index) report.
The July survey produced for Ulster Bank by IHS Markit, shows a solid growth of new orders fed through to a further increase in business activity, while there were reports of success in securing new work from the Republic of Ireland amid sterling weakness, helping to boost total new business.
This is offset though by the fact the north's private sector firms recorded the weakest performance in business activity, after the North East of England, with manufacturing easing to a 14-month low and employment falling for the first time in six months.
The rate of input cost inflation eased in July and was slower than the UK average for the first time in more than two years, but is accompanied by a sharp rise in input prices, largely due to currency weakness and higher staff costs.
The construction industry report a more marked easing, with ouput, new orders and employment all falling in July, while retail sales stabilised last month following June’s decline. There was also a slight pick-up in orders with employment growth continuing albeit at its weakest rate in two years. The wider services industry was the sector to buck the easing trend as business activity growth accelerated to a 16-month high, with job creation picking up too.
Despite the mixed responses the report showed confidence exists among Northern Ireland companies, with close to 32 per cent predicting output will rise over the next 12 months, against 13 per cent forecasting a fall.
Ulster Bank chief economist Richard Ramsey said while growth was to be welcomed, it was a concern that rates of expansion lag behind the UK average.
“The reality is that the overall tone of the latest survey is characterised by slower rates of growth. Firms reported a slight slowdown in the rate of growth in business activity, with July’s figure at a nine-month low. Meanwhile, new orders and exports saw their growth rates quicken. The private sector has been increasing its staffing levels for the last two-and-a-half years. Last month, however, the pace of job creation slipped to a six-month low."
