Economy remains 'the worst in the UK'
Published 09/08/2010 | 08:00
Private sector business activity fell again for the eighth consecutive month, with one in five firms cutting staff in July, new figures reveal today.
The latest report from the Ulster Bank Northern Ireland PMI (Purchasing Managers' Index) showed the rate of contraction in the private sector accelerated further in July to its fastest rate in five months.
This was despite a modest gain in manufacturing output, which recorded its strongest rise in three years.
All sectors covered by the survey registered shrinking workforces during the month, with the most substantial job-shedding seen in construction and services.
Firms linked falling activity to a lack of confidence in the wider economy, housing market uncertainty and cuts in government contracts.
Commenting on the findings, Richard Ramsey, chief economist at the Ulster Bank, said: "This year is anticipated to be a game of two halves in terms of economic growth. At a global level, a number of economies have begun to experience a slowdown in growth during the third quarter.
"In a similar vein, the second half of 2010 is expected to be much weaker than the first in Northern Ireland, the only difference being the local economy was already in a state of decline."
On the jobs front Mr Ramsey said Northern Ireland remains "the worst performing UK region by quite some margin".
Private sector jobs have now been falling for almost two-and-a-half years (or the twenty-ninth consecutive month).
"Service sector employment fell at its sharpest rate in the survey's history. Furthermore, the lack of demand alongside competitive pressures has also triggered service sector firms to discount fees and charges at a record rate," he said. "The current health of the service and construction sectors is particularly concerning given that the huge programme of public expenditure cuts has barely got underway."
One of the few encouraging signs for the economy was that the rate of input cost inflation has eased to a six-month low.
However, the overall picture painted by the survey is gloomy.