Business activity and new orders rise at fastest pace I year-to-date

Commenting on the survey, Richard Ramsey, Chief Economist Northern Ireland at Ulster Bank, noted that:

“The Northern Ireland private sector continued to defy political and economic uncertainty in September, seeing further marked increases in output and new orders that were both the fastest in 2017 so far. Local firms are also faring better than their counterparts across the UK as a whole at present, with the acceleration in growth contrasting with signs of a slowdown at the UK level.

“Part of the improvement in new business was reflective of continued growth of new export orders. Sterling weakness continues to act as a tailwind for exports, helping firms to secure new work in the Republic of Ireland in particular. The strength of demand across the border and in the euro area in general is also a factor helping new business from outside the local market to increase.

“A key highlight from the latest survey findings was the sharpest rise in employment since mid-2014. This suggests some level of confidence among firms that external factors won’t negatively impact demand too much in the near-term at least. This is supported by data on business confidence which rose to a four-month high in September.

“Sector data offered some solace for local retailers, pointing to a rebound in growth following signs of stagnation during the summer. Services remained a strong performer, and registered the fastest pace of job creation for over a decade. Manufacturing growth remained solid while construction remained the main area of concern, although even here there was some positive news as new orders increased for the first time in seven months.

“Sterling weakness is a double-edged sword for firms. While the currency is helping companies to secure new export orders, it is also acting to push up input costs. The rate of cost inflation quickened to a four-month high in September, with strong price rises across all monitored sectors. This, coupled with the aforementioned uncertainty, sounds a note of caution as we head towards the year-end.”

More information can be found by downloaded the Ulster Bank pdf or visiting: https://ulstereconomix.com/2017/10/09/new-orders-rise-at-fastest-pace-in-year-to-date/