NI business output growth at slowest level in two years

The province fell down the UK rankings from fastest growing private sector in July to being second from bottom in September
The province fell down the UK rankings from fastest growing private sector in July to being second from bottom in September

Business activity, new orders and employment all rose at weaker rates during September, while sentiment dropped to the lowest in the 19-month series history as Brexit continues to weigh on firms and their plans for the future.

The data comes in the latest Ulster Bank PMI report for the province and signalling a further loss of momentum across the local private sector.

But while all sectors remain in growth mode “for now”, Richard Ramsey, chief economist for Northern Ireland at Ulster Bank said Brexit remained an unavoidable obstruction.

“What does or doesn’t happen regarding Brexit will exercise Northern Ireland businesses in the quarters ahead and looks set to continue to impact on both confidence and activity,” he said.

“September marked Northern Ireland’s slowest rate of private sector growth in 23-months, considerably behind that recorded at the beginning of the third quarter,” he said.

“This meant that Northern Ireland slipped down the UK rankings from being the fastest growing private sector in the UK in July to being second from bottom in September.”

That slowdown, he said, was not unexpected, given that July received a significant weather-related boost. Taking the quarter as a whole, he said the deceleration looked more modest.

“However, the July-September period still marks the slowest quarterly rate of private sector growth that Northern Ireland has seen in five quarters.

“In addition, Northern Ireland’s poorer performance at the end of the quarter relative to the rest of the UK can’t be explained solely by the weather, given that July’s sunshine was a UK-wide phenomenon.

“Indeed, Northern Ireland firms are now the least optimistic in the UK, and their most pessimistic since this indicator began 19-months ago, with Brexit a major concern for respondents. Notably, the construction sector, which had been experiencing something of a relative purple patch, is seeing expectations fall. Firms in this sector now expect their workloads to be lower in 12-months’ time than they are currently, with major public sector infrastructure projects being put on hold.

“Concerningly, all sectors experienced a slowdown in September in terms of activity, orders and job creation.”