Sharp rise in new orders supports further growth of activity
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“Despite on-going inflationary pressures, Northern Ireland’s private sector continued to report expansion in activity, new orders, and employment; albeit at a slower rate. Northern Ireland mirrored the Republic of Ireland in the sense that the rate of business activity growth eased. This was in contrast to the UK picture where there was an acceleration in activity across most regions. As a result, Northern Ireland has slipped down the business activity growth table, with only Scotland now reporting a weaker rate of growth. This UK strength is reflected in the rate at which new orders are coming in at Northern Ireland firms; with overall new orders growth remaining robust, despite export orders easing back.
“At a sectoral level, retail was the fastest growing for the second month in a row, with the construction industry also reporting much-improved business conditions. Output, new orders and employment also grew at faster rates in the sector, with employment growing at its fastest rate in 41-months. There were also some signs of encouragement for local manufacturing, with new orders growth rising to its highest level in over three years. Cost pressures remain the key challenge, with headline inflation remaining elevated largely due to rising commodity and fuel prices. As a result, firms continued to increase their prices for the 24th month in a row, which will continue to hit consumers’ pockets in the months ahead. In this environment, some caution is being displayed by consumer-facing firms. Retail has been a key driver of employment growth over the past few years. However, the latest survey indicates that the pace of job-creation within the sector is now sluggish. Despite no shortage of challenges, particularly on the political front, local firms remain optimistic about the year ahead; albeit slightly less so than they were in September.”