North’s Economic Recovery Continues, Report Suggests

The recovery of Northern Ireland’s economy appears to be continuing, according to the latest date from Ulster Bank’s Purchasing Managers’ Index (PMI).

The September report shows a third successive month of rising business activity.

The report, produced for the bank by Markit, found that firms were taking on extra staff as a result of rising workloads.

The rate of input cost inflation accelerated but improving demand meant that companies responded by raising their output prices at the fastest pace in five years, it said.

Ulster Bank’s chief economist in the north, Richard Ramsey, said companies were “experiencing something of an Indian summer”.

“The retail, construction and manufacturing sectors all posted faster rates of growth in activity, which helped push the overall business activity index to its highest level in more than six years,” he said.

“The rate at which new business is coming in is also still growing – however, not as strongly as it was, due to an easing of new orders in the services sector.

“In terms of employment a significant slowdown in the rate of job creation within the services and manufacturing industries was largely offset

by a pick-up in employment growth within construction and retail.

“It was the first month in the series history that all four sectors simultaneously recorded employment growth.”

However, Mr Ramsey said not all sectors were yet out of the woods.

“According to the official quarterly output and employment surveys, Northern Ireland’s construction industry was the first sector to enter recession and remains the last to exit,” he said.

“However, the PMI survey, which has been a reliable indicator of the local construction industry’s performance to date, suggests that the sector has finally boarded the recovery train.

“Indeed, the September survey represents the best set of monthly figures within the quarter with a marked acceleration in construction activity and a pick-up in new orders and employment levels.

“Furthermore, construction firms were able to raise prices for the first time in the series history.”

Mr Ramsey said it was not “an entirely rosy picture as inflation pressures picked up with the survey recording the fastest rate of growth in input cost inflation since April 2012”.

“Increased salary payments were quoted as one source of this inflationary pressure, and as the recovery takes hold, this trend is likely to continue,” he said.