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Business activity in Northern Ireland back on rise after post-Brexit slump

By John Mulgrew

Published 12/09/2016

Ulster Bank chief economist Richard Ramsey
Ulster Bank chief economist Richard Ramsey

Northern Ireland's private sector has returned to slow growth after suffering a post-Brexit slump, a new survey has shown.

Business activity rose slightly to 50.8 - where 50 means no growth - during August.

That followed a small drop overall in July, according to the latest Ulster Bank purchasing managers' index (PMI).

But while output returned to growth, new order levels continued to fall.

And the drop in overall new orders came in spite of a rise in new export business, the survey showed.

"Three of the four monitored sectors saw activity increase, led by manufacturing," the survey said.

And services saw "return to growth following a decline in July".

But the construction sector recorded a reduction in activity for the fifth month in a row.

While output returned to growth in August, new order levels continued to fall, albeit at a weaker pace than in July.

Meanwhile, companies here are continuing to take on extra staff again, with a greater number of firms saying they were hiring in August.

That's the 19th successive month where there has been a rise. However, the rate of job creation did ease once again last month.

"According to the PMI surveys, the UK economy has witnessed something of a 'V-shaped recovery' over the last three months," said Richard Ramsey, chief economist at Ulster Bank.

"Business activity dropped in July, following the UK vote to leave the EU, before rebounding in August.

"Northern Ireland's private sector performance has followed a similar pattern, albeit the rebound has been much weaker."

"While the headlines may focus on a return to growth and ongoing job creation, these cannot conceal the notable weaknesses that lie beneath.

"In particular, the two growing concerns are the surge in inflationary pressures and stagnation within the local services sector," he added.

"Last month, service sector firms reported their first fall in staffing levels in 39 months.

"With orders contracting for the last two months there is no sign that activity will improve."

Belfast Telegraph

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