Sharpest rise in new orders in over seven-and-a-half years

Today sees the release of January data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – signalled a positive start to 2022, with new orders returning to growth and output rising at an accelerated rate. That said, there were some signs of job creation easing and inflationary pressures remained pronounced.

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

“With concerns over Covid-19 fading fast, NI’s private sector posted a surge in activity in February. Output hit an eight-month high, with all four sectors recording growth for the first time since June last year. Meanwhile, new orders rose at their fastest pace in seven-and-a-half years. Only construction, of the four sectors monitored, failed to record an uplift in new orders last month.

“Despite robust demand, employment growth slowed to a 12-month low, with NI posting the slowest rate of job creation of the 12 UK regions. Clearly firms are struggling with skills shortages and are finding it difficult to get suitable candidates to help meet the demand.

“Manufacturing was the best performer at a sector level by a significant margin. Output and orders in the sector expanded at record rates while manufacturing firms continued to increase their headcounts to cope with burgeoning order books and mounting backlogs.

“February’s PMI report was therefore very encouraging across a number of levels.

“However, the economic outlook has changed drastically with Russia’s invasion of Ukraine. Commodity prices have rocketed, and an unprecedented array of sanctions have been imposed on Russia. Businesses therefore face a new source of supply chain disruption. Clearly the primary concern is with the people of Ukraine and the severe situation they face. But businesses and households here in NI are also set to be impacted by the situation too, most particularly through the rampant inflation in energy and food prices, as well as the general uncertainty.”

The February 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 ellen.browne@bnpparibas.com

Further PMI material including a podcast and infographics are available at www.ulstereconomix.com