Northern Ireland was the only region within the UK not to experience an upturn in business activity last month, new figures today show.

It comes after the province’s private sector was hit by its 20th consecutive month of output decline.

The latest Ulster Bank Northern Ireland PMI report — produced by Markit Economics — also revealed that the local economy continued to lag behind the wider UK economy.

However, data indicated that output and new business levels in the Northern Ireland private sector both fell at the slowest pace since May 2008, which suggests that the recession eased further in July.

Commenting on the latest survey findings, Richard Ramsey, Northern Ireland economist, Ulster Bank, said: “Looking ahead, the expected recovery will be weak with new orders continuing to fall at a significant, albeit slower, rate.

“More than one-third of firms reported a decline in incoming business in July.

“The decrease in new orders was most intense within the services sector.

“Unlike their UK counterparts, Northern Ireland firms continue to experience an increase in cost pressures for the fifth month in a row.

He added: “Meanwhile, the lack of demand continues to weaken the pricing power of Northern Ireland's firms, which in light of the rising cost base is squeezing profit levels.

“The pressure on these profit margins remains particularly severe within the construction sector.

“As a result, the construction industry continues to bear the brunt of employment losses.

“Outside of construction, the other broad sectors of the economy reported a further lowering of workforce numbers.”

Incoming new business placed at Northern Irish private sector companies declined further in July, extending the current period of contraction to 20 months.

Despite easing since June, the rate of decline was still marked. Respondents reported that the reduction in new business reflected weak demand, as concerns over the current economic climate continued.

Companies also reduced their workforce numbers for the 17th successive month in July.

Despite accelerating slightly from the previous month, the rate of job shedding was much slower than the considerable reductions recorded around the turn of the year.

Rising raw material prices were cited as having placed upward pressure on firms’ input costs, with oil-related products mentioned in particular.

The prices charged by Northern Ireland private sector firms were reduced again in July, albeit at the slowest rate since last November.