New Business Rises For Ninth Successive Month

The recovery in the Northern Ireland economy continued apace in February with a ninth successive monthly rise in new business.

That is according to Ulster Bank‘s latest Purchase Managers’ Index (PMI) report which showed a sharp increase in activity in the private sector.

The report, produced by Markit, also recorded an easing in the rate of cost inflation while companies lowered their output prices.

All four monitored sectors registered growth of activity, led by retail.

New business rose for the ninth month running in February, and at a substantial pace as respondents indicated improved success in securing sales.

Meanwhile, increased backlogs of work and strong growth of new business led companies in Northern Ireland to raise their staffing levels.

The service sector saw the most marked slowdown in inflationary pressures, while manufacturers also posted a much weaker rise than in the previous month.

“Whilst the pace of growth in business activity and new orders eased last month, the rates of growth still remain very strong,” Ulster Bank’s chief economist in the north Richard Ramsey said.

“After all, the January survey saw new order growth at a record high and business activity expanded at its fastest rate in almost 10 years. Therefore the slight slowdown in growth in these two areas is coming from a very strong position.

“The UK and the Republic of Ireland, Northern Ireland’s two key trading partners, also saw an easing in the pace of growth in business activity and new orders in their February PMI surveys, whilst local firms reported an easing in the pace of job creation in February, down from January’s six-and-a-half-year high.

“Another encouraging sign in the latest Ulster Bank PMI report concerned inflation. Input cost inflation eased significantly in February, to its weakest rate since July 2012. Whilst this was largely due to an easing in cost pressures within the service sector, manufacturing firms signalled the slowest rise in input prices in 20 months.

“The one negative feature of the latest survey is the fact that local firms lowered their output prices in February for the first time in seven months; though this was solely due to price reductions in the service sector. On the other hand, the local construction industry raised its prices in February at the fastest rate since the series began.

“This feature is part of a wider improvement in business conditions for the construction sector. Indeed both output and employment growth within the construction sector accelerated in February, albeit from a low base. Whilst all sectors continue to report strong rates of growth, the retail sector reported the fastest rates of growth in output [sales], new orders and job creation.”