Northern Ireland’s order books were boosted in May and job creation accelerated as firms responded to current workloads and positive expectations around future new work.
New data from the Ulster Bank Northern Ireland PMI report this morning reveals that job creation hit a 13 month high despite well -documentd concerns about the possible negative impact of Brexit.
However that growth wasrestriced almost entirely to the services sector.
“Eleven months have passed since the EU referendum,” said Richard Ramsey, chief economist for Northern Ireland with the Ulster Bank.
“Over this period the rate of private sector growth amongst local firms has been broadly in line with the growth rate in the eleven months prior to the vote. However, in May, Northern Ireland, like most other regions of the UK, saw a slowdown.
“Business activity expanded, as it has expanded in each of the last eight months, but the rate of expansion remained below the average rate that prevailed before the downturn. New orders though picked up, with demand strongest from export markets. Indeed, order books from export markets have been expanding at a faster rate than the pre-downturn long-term average in each of the last eight months.”
While the exchange rate had been a factor behind Northern Ireland’s strong export performance, Mr Ramsey said sterling weakness had also pushed up input costs alongside the price of goods and services.
“The most encouraging indicator in the latest survey concerned employment.
“Firms increased their staffing levels at their fastest rate in 13 months. The pick-up in the pace of job creation was due solely to the services industry, with all other sectors signalling a slowdown in employment growth. Service sector firms increased their staffing levels in May at the fastest rate in 17-months.
This follows a sustained period of subdued growth.
“Other encouraging signs were evident within manufacturing. Output and new orders amongst manufacturing firms picked up markedly in May.”
On the downside, he said the retail sector had “slowed markedly” after a recent “purple patch”.
“Both retail sales and orders dropped marginally in May with sales growth at its weakest since December 2015. Construction firms reported lacklustre growth, with new orders falling for the third month in a row.
“The construction sector firms also signalled that they expected activity to be broadly unchanged over the next 12 months.
“Conversely, business confidence for the year ahead amongst all other sectors improved in May.
“It remains to be seen whether this optimism is justified. Political developments at home and abroad will have a significant bearing on this going forward.”