Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – indicated that the Northern Ireland private sector remained in contraction as demand continued to be impacted by intense price pressures. That said, there were further signs of inflation softening. Meanwhile, firms remained pessimistic about the year-ahead outlook and the rate of job creation softened to an 18-month low.
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“NI’s private sector contraction continued last month with output / sales and new orders falling for the fourth month running. While the pace of decline in orders and output eased relative to July, the rate of contraction was still marked. Northern Ireland was one of nine of the 12 UK regions to report falling business activity.
“Once again, retailers are bearing the brunt of the downturn, posting the steepest falls in demand as the cost-of-living crisis continues to impact on consumers. Retail is also the only sector not to increase staffing levels last month. On the other hand, manufacturing bucked the wider trend as the only sector experiencing a rise in business activity, posting a marginal increase in output last month.
“Inflationary pressures continue to be cited as a key factor curbing demand. However, the rate of input price inflation eased to its weakest rate since April last year. But it is worth noting that the price increases that are now being experienced are still stronger than anything reported prior to May 2021.
“Positives were thin on the ground in the latest report. Although employment growth continued, it was the weakest pace in 18 months and many firms continued to struggle to find suitable candidates to fill vacancies. The one silver lining with the downturn in demand is that it has eased the pressures on overstretched supply chains. However, this won’t be much consolation to most companies who face an increasingly hostile economic environment and outlook.
“We are in the midst of a cost-of-living and cost-of-doing-business emergency with rising energy costs the primary driver behind the squeeze on disposable incomes and profitability. Last week, the UK government announced a range of measures to mitigate against the worst effects of the surge in energy costs and we wait to see and hear how similar measures will be applied to Northern Ireland. The clock is ticking.”
The June PMI report for Northern Ireland and the NatWest report for the UK regions are attached for your information. Ulster Bank no longer sponsors the Republic of Ireland Construction PMI. BNP Paribas have taken over this survey. To be included on its distribution list please contact firstname.lastname@example.org
Further PMI material including a podcast and infographics are available at www.ulstereconomix.com