Slightly sharper fall in activity in February
Today sees the release of February data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – signalled that the Northern Ireland private sector remained in contraction territory, and saw rates of decline in output and new orders quicken slightly from the start of the year. Business confidence also softened. One bright spot, however, was employment which increased for the third month running and to the greatest extent since November 2018.
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“Northern Ireland’s private sector had reported a notable improvement in business confidence in recent months. And February saw this positive outlook broadly maintained across all sectors. However, despite this, tangible signs of improved performance remain thin on the ground and confined to a pick-up in employment growth, which saw Northern Ireland firms increase their staffing levels at the joint-fastest rate (alongside London) of the UK regions.
“While Northern Ireland topped the regional league table for employment though, it remained at the bottom for output and new orders. Indeed, Northern Ireland was the only UK region not to report a rise in output last month. The pace of decline in output remained significant and marked the twelfth successive month of deterioration. New orders posted a marginal decline with some firms reporting that contracts coming to an end are not being replaced. Domestic demand is on the rise but the fall in export orders continued for a thirteenth month. Brexit uncertainty is cited as deterring some customers. That said, other firms are benefiting from increased demand from the Republic of Ireland which continues to enjoy strong economic growth.
“Since the February survey was conducted the economic headwinds facing the global, national and regional economies have intensified. The accelerated spread of the Coronavirus beyond China into Europe, the Middle-East and the Americas threatens a global recession. China’s manufacturing PMI (see below) signalled its deepest contraction on record. This has severely disrupted global supply chains with the hospitality, tourism and airline industries hit by a slump in demand. Indeed, one leading UK regional airline has gone into administration. Economic conditions for all economies, including Northern Ireland, are expected to get worse before they get better.”
The February PMI report for Northern Ireland, the NatWest report for the UK regions and the Republic of Ireland’s Construction are attached for your information. Further PMI material including a chart pack, podcast and infographics are available at www.ulstereconomix.com