Northern Ireland’s businesses enjoyed the biggest surge in demand for goods and services in May as new orders hit a record high, it is claimed today.
The confidence-building statistics are contained in this morning’s Ulster Bank Northern Ireland PMI report which points to further strong growth in the output of the private sector boosted by a series-record increase in new orders.
Higher new business also contributed to a marked build-up of outstanding work, and companies increased employment accordingly.
The rate of input cost inflation eased for the second month running, while firms left their output prices largely unchanged.
“According to the latest survey, the second quarter of the year is set to be even stronger than the first as far as Northern Ireland’s private sector economic recovery is concerned,” enthused Richard Ramsey, chief economist for Northern Ireland at the Ulster Bank.
“Once again, the May survey is littered with a series of record highs, including firms reporting the sharpest rise in new orders since the survey began in August 2002.
“With burgeoning order books, this suggests that business activity will remain buoyant for some time yet.”
All sectors of the economy posted strong rates of growth in business activity and staffing levels in May – although the retail sector saw its rate of growth in business activity slow to an 11-month low.
All sectors, bar retail, also reported an easing in input cost inflation last month. Although rising wage costs, which is a sign of recovery, remains a recurring theme.
Meanwhile, the manufacturing sector reported the fastest rate of growth in employment since the series began.
The sector breaking the most records though is the construction industry.
In this survey, construction reports its fastest rate of growth in business activity on record, which eclipses the previous high in April by quite some margin.
Indeed, no sector of the economy in the PMI survey’s history has reported as high a rate of growth in business activity as the construction industry in May.
“It should be noted, however, that no sector of the economy experienced the record rates of decline that the local construction industry has experienced,” said Mr Ramsey.
“Therefore what we are seeing is a period of catch-up from very low levels of activity.
“Indeed, the official figures show that the number of housing starts was still falling in the last quarter of 2013.
“Nevertheless, it is still encouraging that the pace of business activity, new orders growth and job creation in the construction industry all increased at record rates last month.
“Hopefully this is signalling a much-needed upturn in the house building sector which is long overdue.
“Outside of the construction industry, the economy’s largest sector – the services industry – continues to expand at a rapid rate in terms of output, new orders and employment.
“It is likely to have been helped, at least to some extent, by big events in May such as the Giro d’Italia and the three-day Balmoral Show.
“To date, Northern Ireland’s economic recovery has largely been driven by the robust recovery in Great Britain.
“However, it is encouraging to note that last month firms reported their fastest rate of growth in export orders since the credit crunch first began in August 2007.”