Business activity falls for first time in 14 months

Today sees the release of May data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – signalled reductions in output and new orders as steep inflationary pressures hit demand. Indeed, output price inflation was at a record high. The impact of price pressures also hit business expectations, which turned negative. On a more positive note, employment continued to rise.

Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:

“Economic forecasts at a global and UK level continue to be downgraded on an almost monthly basis. The latest survey of Northern Ireland’s private sector saw the deterioration in business conditions accelerate in May. Local firms reported a fall in business activity for the first time in 14 months with the significant declines in retail and construction outweighing continued growth within the manufacturing and services sectors. Inflationary pressures and heightened uncertainty are hitting demand and delaying investment. Input cost inflation in May fell just shy of October’s record rate but local firms increased their prices at the fastest pace in the survey’s history. The cost-of-living crisis is making its presence felt, particularly on retail, with both sales and new orders slumping in May. Construction remains mired in an order book recession with last month’s steep decline marking the eleventh successive month of contraction.

“The overall outlook is for things to get worse, with new orders falling at their fastest pace since February last year. Northern Ireland firms’ order books contracted at the fastest rate amongst the 12 UK regions. Manufacturing, services, construction and retail all contributed to the drop in incoming business. Despite the advantages afforded to local firms through the NI Protocol, Northern Ireland firms remain the least optimistic of any UK region regarding sales / activity in 12 months’ time. Local firms expect sales and activity to fall in a year’s time with this negativity driven by retail. Manufacturing is the only sector projecting meaningful growth in 12 months’ time.

“The picture regarding employment is much more robust. It is the one bright spot in the survey, with continued growth in firms’ staffing levels reported for the 15th month in succession. But skills shortages remain a problem, from both a capacity and wage pressure perspective. It remains to be seen how a slowdown in the economy will improve this, providing one potentially silver lining to the downturn cloud.

“Overall, with economic conditions set to deteriorate, the call for the Chancellor and Stormont to provide additional support for business is set to intensify.”

The May 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

Further PMI material including a podcast and infographics are available at

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