Sharpest rise in NI output so far in 2017

Construction activity is said have slowed despite the evidence of building activity around Belfast and other recent housing announcements
Construction activity is said have slowed despite the evidence of building activity around Belfast and other recent housing announcements

Northern Ireland businesses enjoyed the strongest rise in business activity of the year-to-date in April according to the latest Ulster Bank PMI report.

While new orders continued to increase solidly, companies said they remained optimistic of further output growth over the coming year said the repor produced for Ulster Bank by Markit.

The rate of job creation accelerated in the period while on the price front, both input costs and output charges continued to rise sharply.

“Northern Ireland’s private sector has had an encouraging start to the second quarter of 2017,” said Richard Ramsey, chief economist for Northern Ireland at the Ulster Bank.

“This was reflected in faster rates of growth in activity, export orders and employment.

“Indeed, output rose at its fastest pace so far this year, and firms increased their staffing levels more quickly than at any point in the last 10 months.”

Nevertheless, he said inflationary pressures remained a challenge, with sterling’s recent bout of weakness pushing costs higher.

Input cost inflation remained most acute for manufacturers, but he said retailers and service sector firms were far from immune, having seen cost bases increase at the fastest rates since September 2008 and March 2011 respectively.

“Retailers have enjoyed a cross-border shopping tailwind since June last year.

“Not surprisingly though the rapid rates of growth in retail sales activity have eased significantly.

“The pace of job creation in retailing has also slowed, to its weakest rate since July 2015.

“In terms of the wider services sector, its recovery has been rather subdued of late. However, April’s PMI survey reveals a marked improvement in conditions.”

Service sector output hit a 12-month high, whilst new orders and employment hit 13-month and seven-month highs respectively, Mr Ramsey added.

Outside of services, manufacturing activity remains relatively buoyant, but construction firms saw activity stagnate and new orders contract in April.

“Overall, despite the ongoing uncertainty with Brexit, Northern Ireland’s private sector firms remain confident about growth prospects for the year ahead,” he said.

“However, they are not as optimistic as their counterparts in Great Britain.”