Northern Ireland’s private businesses grow despite cost concerns

Jobs and orders are on the rise in Northern Ireland, according to a new report on economic activity in the private sector.

he the last Purchasing Managers Index (PMI) for november nods to a recovery in business with signs of stabilizing new orders and job growth.

Produced for Ulster Bank by IHS Markit, the index rose in all sectors except construction which fell to 47.8.

A figure above 50.0 indicates an increase over the previous month.

Retail trade rebounded to 52.3 largely thanks to the High Street Voucher Scheme.

Some companies reported increased production with improved orders, while new business was broadly flat after two months of decline.

But supply chain issues persisted and continued to impact operations as inflationary pressures “remained acute”.

Richard Ramsey, chief economist for Northern Ireland at Ulster Bank, said retailing helped push the PMI index up for the month of November to 52.9 from 52.2 in October .

“Northern Ireland saw the pace of trade accelerate in November, but the increase was only due to a rebound in one sector: retail. Local retail sales rose in November for the first time in four months, with the High Street Voucher Scheme undoubtedly helping to pick up demand.

Overall, however, despite slower growth rates compared to October, the manufacturing sector remained the best performer of the four sectors monitored, with output, orders and employment all increasing at a strong pace.

“Service firms, on the other hand, reported their weakest rate of business expansion in eight months, and incoming orders were broadly flat, while construction firms recorded their fifth consecutive month of contraction. of production and orders. “

He said the outlook for the private sector “remains difficult”. “Indeed, the recovery in retail sales in November coincides with a drop in new orders, indicating a slowdown in the coming months.

“The most encouraging aspect of the latest survey is the continued robust employment growth rates. Although this is mostly a story of manufacturing and services, all four sectors increased their workforce in the past month.

“Regionally, the private sector recovery in Northern Ireland continues to lag behind its peers in the UK. After north-east England, Northern Ireland recorded the lowest rate of growth in business activity.

“In addition, Northern Ireland was the only one of the 12 UK regions to record a drop in new orders in November.

“While some companies are benefiting from increased North-South trade, export orders overall have continued to decline at a significant pace.

“The drop in November extended the period of drop in orders to 34 months. Manufacturing is the only sector in Northern Ireland that appears to be outperforming the UK.

“Rising inflation and lengthening supplier delivery times remain two major hurdles businesses around the world face. But once again, businesses in Northern Ireland are experiencing the highest input cost inflation rates in the UK. As a result, local businesses are raising their prices at an all time high and faster than elsewhere.

“For the first time since the pandemic, however, the private sector in Northern Ireland was not the most pessimistic about 12-month production in the UK.

“Local business optimism for production peaked in six months, with sentiment improving across industries.”

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