Falling workloads and soaring prices led private sector firms to reduce staffing levels in April, according to Ulster Bank's research.

Jobs are continuing to be shed in manufacturing, but service sector workforces expanded during the month.

A further decline in activity was signalled at the start of the second quarter of this year, according to data from the latest Ulster Bank PMI (Purchasing Managers' Index) report.

The report — produced for Ulster Bank by NTC Economics — signalled a sustained contraction in private sector output at the start of the second quarter.

Both activity and new business declined for the fifth month running, while inflation of both input and output prices accelerated to new records. Firms continued to shed staff on average in the latest survey period.

Commenting on the latest survey findings, Richard Ramsey, Northern Ireland economist with Ulster Bank, said: "The key theme in the US and European economies is one of slower growth and higher inflation, and Northern Ireland proves to be no exception in this regard.

"Northern Ireland firms have responded to the rising cost burden by raising output prices at a record rate. However, as this has failed to keep pace with cost inflation, profit margins are under renewed pressure.

"In March we were the only UK region to experience a contraction in business activity but since April, we have been joined by four other UK regions."

He added: "Furthermore, activity amongst UK firms as a whole slowed sharply in April and remains just above the threshold signalling no change in output.

"The impact of falling workloads has filtered through into the labour market with Northern Ireland firms recording marginally lower levels of employment for the second consecutive month."