Economic activity strongest in 12 years
Published 16/07/2014 | 09:11
Construction is driving Northern Ireland's economic recovery, according to a new survey – but most of the work is coming from Britain and the Republic of Ireland.
The latest Ulster Bank purchasing managers index (PMI) said business activity rose for the 12th month running during June, marking the strongest start to any year since the poll first began over 12 years ago.
Staffing levels and business activity rose across all four monitored sectors, led by retail and manufacturing.
But June also saw the weakest period of growth in export orders for eight months because of the strengthening pound.
Ulster Bank chief economist Richard Ramsey said Northern Ireland was well on course to secure a second year of private sector recovery.
But he added: "The pace of private sector growth will moderate the longer the recovery progresses and as the economy normalises.
"Indeed, Northern Ireland's private sector reported an easing in the rates of growth across all key activity indicators in June."
He said order books for construction firms were filling up at a rapid rate but that the growing workloads were mainly thanks to work in Britain and the Republic.
And improvements in the export market will continue to be sensitive to exchange rate movements, which affect price competitiveness, the leading economist said.
David Dobbin, chief executive at dairy firm Dale Farm, which last week announced record profits, said that if the situation continued, new export orders could be hampered.
"When we have export sales in dollars or euros, the strong pound makes us much less competitive in international markets and that makes it harder to win new business."
Stephen Kelly, chief executive of Manufacturing NI, said the strong sterling was hurting exporters – but that Northern Ireland's manufacturers were also hampered by high energy costs.
"We really do need action to address this in the immediate term," he said.