Business activity declines at rapid rate in Northern Ireland
Northern Ireland’s private sector is deteriorating while the rest of the UK sees growth, according to Ulster Bank’s chief economist.
Ulster Bank today released its October data from its purchasing managers’ index (PMI).
October’s PMI signalled that business conditions continued to worsen in the private sector |during the month, with activity decreasing at the fastest rate |in three months.
Richard Ramsey, chief economist at Ulster Bank, said: “Whilst the October survey saw the UK post its strongest rate of growth in three months, Northern Ireland’s private sector firms reported their sharpest rate of decline over the same period.
“This highlights that the two economies continue to move in opposite directions.”
The main findings of the |report were a substantial fall in new business, a further decline in employment and a steady rate of output price discounting.
A further fall in private sector activity meant October was the 11th consecutive month of contraction. Reduced client demand was blamed for this, a result of continuing economic uncertainty.
The rate of job losses was the slowest since May, however |the rate is “solid” and faster |than average.
Falling new business was cited as the main reason for shedding employees.
Output prices fell for the 25th month in a row, with anecdotal |evidence suggesting that many firms were unable to pass on |higher costs to customers because competition for new work was too strong.
The general rate of inflation was lower than the average for 2010. However, average input costs for the private sector increased sharply in October.
Increased fuel costs were given as the main driver of inflation.
The prices of wheat, cotton and polyester were all reported to |have risen.
On a positive note, manufacturing was reported to have grown, but was the only sector to have done so.
New export orders fell for the 33rd consecutive month.
Mr Ramsey said: “To date, there has only been one month during the last 35 months when Northern Ireland firms have not posted a fall in business output.”
The PMI is a monthly survey carried out for the bank to indicate what is happening in the private sector economy. It tracks output, orders, employment and prices.