Northern Ireland retailers were among the biggest business losers in December as business activity fell again, according to a new survey released today.
The latest Ulster Bank Northern Ireland Purchasing Managers' Index showed that business activity in the province’s private sector fell again in December after holding steady the previous month.
The PMI reading here was 49.2 compared to 56.1 for the UK as a whole. A reading below 50.0 represents a decline in activity.
Despite the Christmas rush and continued cross-border trade, the survey showed retail was one of the sectors that struggled most.
Richard Ramsey, chief economist for Northern Ireland at Ulster Bank said: “Despite the well publicised influx of shoppers from the Republic of Ireland, local retailers experienced the sharpest fall in activity of all the sectors in December. This suggests that the clear out-performance among some firms, in certain locations, is masking the general malaise in the sector as a whole.”
While the PMI failed to return to growth, the economist noted the survey compared favourably with the record lows in business activity seen at the start of 2009.
“The latest survey reveals an easing in the rate of job losses with the decline in employment less marked than in the UK. This continues the trend that has emerged since June 2009,” he said.
“However, with the rate of decline in new orders accelerating for the second consecutive month in December, it will be some time before we see an overall rise in private sector employment. Indeed, Northern Ireland's under-performance, relative to the UK, is most marked in the level of new orders.”
The report also showed that the squeeze on profits continued as costs rose and prices remained under pressure.
“Unlike their UK counterparts, Northern Ireland firms once again reduced the average prices of their goods and services for the 15th consecutive month. Overall, Northern Ireland firms continue to experience a more intense profit squeeze than UK businesses This is most apparent within the manufacturing sector with NI 's higher electricity costs the main factor behind this,” said Mr Ramsey.